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I  I 

I  Official  Proceedings  | 

I  Central  States  Conference    | 

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I  Rail  and  Water      | 

I  Transportation      | 


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Under  the  Auspices  of  the 

Evansville  Chamber  of  Commerce 

Evansville,  Ind. 

December  14-15,  1916 


Official  Proceedings 

FEB  24  1917 

of 


Central  States  Conference 


on 


Rail  and  Water  Transportation 

Held  Under  the  Auspices  of  the 

Evansville  Chamber  of  Commerce 
Evansville,  Indiana 


December  14  and  15,  1916 


FOREWORD 


Realizing  the  vital  interest  of  the  business  men  of  the  nation  in  a 
sound  solution  of  the  problems  involved  in  the  question  of  transportation 
legislation,  now  engaging  the  attention  of  the  administration  and  Con- 
gress, it  was  suggested  to  the  Evansville  Chamber  of  Commerce  by  Mr. 
Henry  C.  Murphy,  its  retiring  president  and  a  member  of  its  Board  of 
Directors,  that  this  Chamber  of  Commerce  might  render  a  valuable  public 
service. 

Mr.  Murphy's  plan,  which  has  since  come  to  be  widely  known  as 
"The  Evansville  Plan",  was  outlined  to  the  directors  of  the  Evansville 
Chamber  of  Commerce,  and  approved  by  them  on  November  11th,  1916, 
and  was  consummated  in  the  Central  States  Conference  on  Rail  and 
Water  Transportation,  held  in  Evansville,  Indiana,  on  Thursday  and  Fri- 
day, December  14th  and  15th,  1916. 

The  purpose  of  the  Conference  was  to  arouse  business  men  to  a  reali- 
zation of  their  interest  and  responsibility  in  the  formulation  of  legisla- 
tion on  the  subject  of  transportation.  It  M'as  thought  that  if  a  conference 
of  business  men,  representative  of  the  six  central  western  states,  Indiana, 
Ohio,  Kentucky,  Tennessee,  Missouri  and  Illinois,  should  be  arranged, 
with  a  program  including  addresses  by  men  of  national  prominence  and 
importance,  representative  of  all  sides  of  the  transportation  question, 
namely:  the  Railways,  Labor,  the  Investor,  the  Shipper  and  the  Public; 
and  providing  also  for  open  discussions  by  participants  in  the  Conference, 
so  that  each  might  have  an  opportunity  to  present  his  views  and  his  judg- 
ment of  the  attitude  of  his  community  as  he  conceived  it,  the  way  might 
be  paved  for  much  helpful  publicity  of  the  transportation  problems,  not 
only  in  the  region  covered  by  the  Conference,  but  throughout  the  nation. 
From  the  attrition  of  minds  thus  brought  together  in  earnest  discussion 
and  enlightened  by  the  presentation  of  the  various  aspects  of  the  subject 
by  leading  authorities,  it  was  thought  some  common  ground  of  agreement 
on  at  least  some  phases  of  the  subject  might  be  found  and  expressed 
in  resolutions  reflecting  prevailing  sentiment  of  the  Conference.  Thus  a 
stimulus  might  be  given  to  the  discussion  of  the  transportation  problem 
through  the  adoption  by  other  cities  of  the  "Evansville  Plan"  or  in  some 
other  way  devised  "by  them. 

The  idea  of  having  a  regional  Conference  comprising  six  states  was 
that  in  this  way  efforts  might  be  concentrated,  and  business  men  and  rep- 
resentatives of  civic  organizations  might  attend  with  little  expense  and 
loss  of  time.     Upon  this  theory  the  plan  was  prosecuted. 

In  more  than  two  hundred  and  fifty  cities  and  towns  in  the  six  states, 
the  newspapers,  the  leading  business  men,  including  the  officers  and  di- 
rectors of  all  the  banks,  and  all  of  the  Chambers  of  Commerce  and  other 
civic  organizations,  were  furnished  with  the  program  of  the  Conference 
and  full  information  about  its  purpose  and  scope. 

Forty  thousand  circulars  and  programs  were  distributed.  More  than 
three  hundred  commercial  organizations  were  furnished  with  literature. 


"^r 


O 


and  over  twenty-five  thousand  letters  were  sent  out  by  the  Evansville 
Chamber  of  Commerce. 

Fifteen  thousand  telephone  messages  calling  attention  to  the  Confer- 
ence in  over  two  hundred  cities  and  towns,  were  delivered  by  local  tele- 
phone to  carefully  selected  lists  of  prominent  and  public  spirited  busi- 
ness men. 

More  than  three  hundred  newspapers  in  the  six  states  carried  articles 
on  the  Conference,  and  many  of  them  also  commendatory  editorials.  In 
other  states,  from  coast  to  coast,  the  leading  dailies  carried  articles  on  the 
Conference  and  its  possibilities. 

Thus,  as  was  contemplated,  a  vast  amount  of  most  valuable  publicity 
was  given  to  the  vital  importance  of  the  transportation  question. 

The  President  of  the  United  States,  members  of  Congress,  and  lead- 
ers in  the  movement  for  constructive  legislation  for  the  best  interest  of  the 
nation,  have  expressed  their  unqualified  approval  of  the  purpose  of  the 
Conference  and  their  interest  in  its  results. 

During  the  first  morning  session  of  the  Conference,  President  Wilson 
sent  the  following  message  by  telegraph: 

"May  I  not  send  my  greetings  to  the  Central  States  Transportation 
Conference  and  express  my  deep  interest  in  the  great  questions  it  has  as- 
sembled to  discuss.  I  wish  that  I  might  have  the  benefit  of  hearing  these 
discussions." 

(Signed)  WOODROW  WILSON. 

It  is  confidently  hoped  that  the  wide  distribution  which  will  be  made 
of  this  report  of  the  proceedings  of  the  Conference  will  serve  to  stimulate 
further  discussion  of  the  question  and  aid  the  law-makers  in  formulating 
sound  and  constructive  legislation. 

Evansville,  Ind. 

EVANSVILLE  CHAMBER  OF  COMMERCE. 


THE  CENtRAL  STATES  CONFERENCE 


THE  CENTRAL  STATES  CONFERENCE 


The  Conference  was  called  to  order  at  10  a.  m.  Thursday,  December 
14,  1916,  by  Chairman  Henry  C.  Murphy,  publisher  of  the  Evansville 
Courier,  with  delegates  and  visitors  from  Indiana,  Illinois,  Tennessee, 
Ohio,  Kentucky  and  Missouri  in  attendance. 

Following  the  invocation  by  Rev.  William  N.  Dresel,  of  Evansville, 
Mayor  Benjamin  Bosse  delivered  a  cordial  address  of  welcome,  into 
which  he  introduced  many  pertinent  and  significant  allusions  to  the  dif- 
ficulties involved  in  any  proper  solution  of  the  transportation  problems. 

Chairman  Murphy  then  addressed  the  Conference  as  follows,  his  sub- 
ject being  "Purpose  and  Scope  of  The  Central  States  Conference." 


Plan  to  Build  Up  Carrying  Facilities. 

If  I  have  a  correct  conception  of  the  purpose  of  this  conference, 
We  are  here,  not  to  damn  the  public,  as  did  a  famed  railroad  magnate 
in  an  ill-considered  moment,  nor  to  damn  the  railroads,  as  too  many  hot 
tempered  Americans  have  been  doing  for  many  years.  Instead,  we  have 
come  to  this  meeting  to  help  to  dam  the  waterways  that  they  may  serve 
their  full  function  as  real  factors  in  our  national  system  of  transporta- 
tion. Finally,  we  are  here  to  develop  and  adopt  a  constructive  program 
that  may  contribute  in  some  measure  to  dam  the  flood  of  adverse  criti- 
cism and  hostle  legislation  to  which  the  American  systems  of  transpor- 
tation have  been  subjected  for  more  than  a  decade — legislation  and  criti- 
cism that  has  retarded  progress,  growth  and  development,  not  only  of  the 
railways  and  waterways,  but  of  the  business  of  the  nation — your  business 
and  my  business.  xi.     ^     *   * 

Huxley  defined  the  first  agnostic  as  the  man  who  was  the  first  to 
see  that  clear  knowledge  of  what  one  does  not  know  is  quite  as  important 
as  knowing  what  one  does  know.  The  sanctification  of  doubt  had  its  origin 
in  the  intellectual  and  moral  strength  of  Socrates,  to  be  further  sancti- 
fied in  a  later  century  by  the  luminous  mathematician  Descartes.  Had 
Huxley's  agnostic  been  fortunate  enough  to  be  associated  with  the  intel- 
lectual followers  of  Socrates  and  Descartes  and  had  the  group  been  faced 
with  a  transportation  problem  such  as  we  face  today  they  promptly  would 
have  called  a  conference  and  invited  to  it  the  Thoms,  Lees,  Walshs, 
Trumbulls,  Muirs,  Kingsburys,  Lathrops.  Leighs,  Bellevilles  and 
Thornes  of  their  day.  After  listening  to  the  views  and  judgments  of  these 
men  they  would  have  formed  honest,  just  conclusions,  settled  on  a  defi- 
nite,' thorough  and  adaptable  policy,  and,  through  it,  found  a  way  out  of 
their  difficulties. 


THE  CENTRAL  STATES  CONFERENCE  5 

All  Not  Well  With  Transportation 

The  Central  States  conference,  which  we  today  bring  into  being, 
is  composed,  I  hope  and  believe,  of  doubters  of  the  Huxley  type.  Each  of 
us  comes  here  with  the  knowledge,  vague  or  certain,  that  all  is  not  well 
with  the  transportation  systems  of  the  United  States;  that  the  doctors 
and  nurses  are  worried  about  their  patients'  condition;  that  the  remedies 
previously  administered  have  had  but  temporary  beneficial  effect.  Some 
of  us  are  optimistic  enough  to  believe  the  attack  merely  an  insignificant 
indisposition,  due  to  high  living  and  a  consequent  inactive  liver,  to  be 
alleviated  by    time  and  clearer  weather. 

Others  regard  the  illness  as  more  serious,  but  not  necessarily  fatal. 
Their  theory  is  that  the  patient  is  suffering  from  mal-nutrition,  due  to 
too  economical  supervision  of  diet  by  a  parsimonious  guardian,  and  that  a 
speedy  cure  can  readily  be  accomplished  by  furnishing  a  larger  and  more 
varied  regimen  of  food  and  drink,  expressed  in  terms  of  higher  tariffs, 
with  relief  from  the  mischievous,  nerve-racking  demands  for  small  change 
and  frequent  holidays  of  the  patients'  children,  as  represented  by  labor 
unions. 

Some  of  us  may  be  utter  pessimists,  thoroughly  discouraged  and  dis- 
traught, certain  that  the  malady  is  of  a  fatal  nature,  which  will  respond 
to  no  treatment,  however  scientific.  Such  believe  the  very  vitals  of  the 
patient  are  so  diseased  that  it  is  folly  even  to  attempt  to  stay  the  surgeon's 
knife.  They  see  the  undertaker,  in  the  person  of  Uncle  Samuel,  just  be- 
yond the  portals  of  the  sorrowing  household  and,  as  discerning,  provi- 
dent and  time-saving  men,  they  would  call  in  that  undertaker,  even 
though  the  corpse  is  not  ready.  They  argue  he  is  a  busy  person,  this  un- 
dertaker, and  economy  for  him  and  everybody  concerned  will  result  if 
he  can  have  a  look  about,  measure  the  almost  moribund  shape  on  the  bed, 
and  start  making  preparations  for  what  is  to  happen  the  day  after  to- 
morrow. Further  than  this,  they  would  bring  in  the  lawyer  and  appraiser 
that  a  quick  inventory  be  made  of  the  chattels  and  realty  of  the  about-to- 
be  lamented. 

Diversity  of  Opinion 

To  repeat,  each  of  us  is  convinced  there  is  sickness  in  the  house, 
though  the  authorities  have  not  yet  tacked  up  the  yellow  flag.  Probably 
each  man  before  me  has  a  well-defined  opinion  of  the  course  properly 
to  be  pursued  by  the  medical  men  who  are  in  charge  of  the  situation — 
our  nation's  president — the  surgeon-in-chief — and  his  assistants— the 
members  of  the  Interstate  Commerce  board.  Congress  and  the  various 
state  commissions.  Diversity  of  opinion  as  to  what  serum  should  be  in- 
jected to  aid  the  sick  body  is  common  among  us.  Each  one  of  us  may 
think  himself  fully  competent  to  diagnose  the  ailrpent  and  treat  the  ill 
person  and  too  many  of  us,  I  fear,  are  inclined  to  proceed  in  haste,  using 
the  remedies  within  easy  reach,  while  some,  and  they  are  not  an  insigni- 
ficant few,  favor  a  quick  incision  with  the  scalpel. 

One  of  the  main  reasons  for  America's  commercial  supremacy  is  to 
be  found  in  the  personal  egotism  of  the  American  business  man.  His  in- 
nate esteem  for  his  own  capacity  leads  him  to  attack  any  problem  and 
any  undertaking,  no  matter  what  its  proportions,  with  sublime  self-con- 
fidence and  assurance  that  brooks  no  thought  of  failure.  He  has  conquered 
equally  perplexing  situations  before  and  is  disturbed  by  no  fear  that  a  so- 
lution to  the  vexed  new  question  is  impossible. 

Our  conference  is  representative  of  American  business  men  of  this 
very  type,  and  their  piesence  here  in  such  large  numbers  leads  me  to 
think  they  are  about  to  attack  another  problem.  This  question,  though  not 
new,  in  recent  months  has  presented  phases  that  are  constantly  changing 
as  kaleidoscopic  variations  occur  in  our  industrial  and  commercial  life. 
This  problem— the  grave,  internal  question  confronting  the  American 
people  today — is  defined  tersely,  yet  completely,  in  the  query,  "What  shall 
be  done  for  and  with  the  American  railways  and  waterways?"  We  are 


6  THE  CENTRAL  STATES  CONFERENCE 

here  at  this  conference  to  answer  that  question  for  the  business  men  of 
the  Central  States. 

President  Wilson  Interested 

When  the  plan  of  the  Evansville  conference  was  outlined  to  Presi- 
dent  Wilson,  he  caught  its  significance  immediately  and  enthusia;5tically 
applauded  the  idea,  voicing  a  hope  that  other  cities  may  follow  Evans- 
ville's  lead  with  the  result  that  regional  conferences  all  over  the  United 
States  might  be  called.  The  president  further  gave  it  as  his  opinion  that 
constructive  policies  should  result  from  our  deliberations  and  praised  a 
movement  broad  enough  to  include  in  its  program  every  side  and  angle 
of  the  transportation  question. 

I  mention  Mr.  Wilson's  views,  not  with  the  thought  of  exploiting 
our  initial  adventure  in  the  uncharted  wilds  of  business  congresses,  nor 
to  emphasize  the  worthiness  of  our  idea,  but  rather  to  indicate  the  trend 
of  the  executive's  thought.  As  I  view  this  expression,  I  take  it  that  he  feels 
the  need  of  suggestion  and  counsel,  and  he  looks  to  the  business  men  of 
East,  West,  North  and  South  to  volunteer  as  guides  to  lead  him  and  con- 
gress out  of  the  Hercynian  forest. 

I  may  exaggerate  the  importance  of  this  conference  and  the  other 
sectional  councils  that  are  sure  to  succeed  it,  but  it  is  my  firm  belief  that 
only  by  means  of  these  assemblages  will  be  found  a  just  and  true  solution 
of  the  transportation  problem.  The  whole  tru+.h  about  the  railways  is  not 
to  be  discovered  at  a  board  meeting  of  railway  presidents,  nor  in  a  con- 
clave of  brotherhood  trainmen,  nor  in  a  shippers'  convention,  nor  yet  in 
the  sessions  of  congress  or  of  the  commissions  handling  transportation 
matters.  But  it  may  be  dug  out  of  the  ma^s  of  testimony  offered  by  the 
witnesses  for  the  various  sides  to  this  controversy  and  it  will  be  revealed 
if  we  are  honest  in  our  search  for  it  and  listen  with  impartial  ear  to  the 
advocates  of  the  various  parties  at  interest.  The  task  is  one  to  appall  a 
Sisyphos,  but  Americans  tolerate  no  laissez  faire  policy  when  vital  issues 
are  at  stake. 

Magnitude  of  the  Problem 

Statistics  are  exceeding  tiresome  and  should  not  be  allowed  to 
intrude  themselves  in  a  well-ordered  conference.  Realizing  this,  I  hesi- 
tate to  offer  figures,  but  I  want  every  individual  here  to  realize  the  magni- 
tude of  the  problem  with  which  we  deal.  To  do  this,  you  must  know  we 
are  concerned  with  questions  involving  railroads  which  operate  over  380,- 
000  miles  of  track,  with  investments  in  road  and  equipment  aggregating 
over  twenty  billions  of  dollars.  When  we  comprehend  that  this  vast  sum 
represents  fully  as  much  as  the  total  wealth  of  a  great  nation  like  Italy, 
we  are  staggered  by  its  significance. 

These  roads,  and  I  should  explain  I  do  not  include  the  intra-state 
carriers  in  these  figures,  but  only  those  reporting  to  Washington,  carry 
over  a  billion  passengers  per  year  and  transport  freight  amountins;  fo 
nearly  two  and  one-half  billion  tons.  The  annual  gross  revenues  of  these 
carriers  now  exceed  three  billions  with  a  yearly  distribution  for  expense 
of  approximately  $2,500,000,000.  In  the  management  and  operation  of 
these  systems,  nearly  two  millions  of  individuals  find  employment — the 
number  varying  by  hundreds  of  thousands  with  the  ebb  and  flow  of  pros- 
perity and  its  hand  maiden,  Commerce. 

The  figures  are  astonishing  by  reason  of  their  immensity  and  the 
problems  that  confront  government  in  its  regulation  of  the  carriers  and 
the  railways  in  their  relation  to  government  and  people  are  equa  ly  be- 
wildering. 

Within  the  past  sixty  days  the  significant  announcement  was  publish- 
ed that  1,100  miles  of  new  railways  in  China  had  been  financed  by  Ameri- 
can capital  and  would  be  constructed  under  American  supervision.  The 
work  will  require  an  expenditure  of  approximately  $100,000,000. 

Do  you  find  pregnant  meaning  in  that  announcement  of  the  American 
International  Corporation?      You  will  when  you  think  of  it  in  connection 


THE  CENTRAL  STATES  CONFERENCE  7 

with  the  difficulties  American  railroads  have  in  obtaining  capital  needed 
for  rehabilitation  and  development.  With  the  stock  of  money  gold  in 
this  country  standing  at  $2,750,000,000 — an  increase  of  $700,000,000 
over  a  year  back — with  $4,500,000,000  of  actual  money  in  circulation 
among  our  people,  with  business  at  such  a  peak  that  the  railroads  are 
108,000  cars  short  of  the  urgent  demand — with  all  these  evidences  of 
utterly  unprecedented  material  well  being,  where  could  one  find  a  man 
or  group  of  men,  willing  to  finance  and  consti'uct  1,100  miles  of  new 
railway  in  the  United  States?  I  venture  the  belief  that  the  needed  cap- 
ital would  be  hard  to  find. 

Only  2,500  miles  of  rail  were  laid  in  the  United  States  in  1914,  and 
in  1915  the  new  mileage  laid  down  was  insignificant — less,  I  have  read, 
than  was  built  in  any  single  year  since  the  Civil  War.  Since  1906  our 
total  mileage  has  increased  only  28,000  whereas  our  proper  internal  de- 
velopment demanded  an  increase  of  100,000  miles. 

aieaning  to  Business  and  the  Home 

The  import  of  this  tremendously  significant  fact  has  dawned  on  the 
man  who  is  paying  $4.00  or  $5.00  per  ton  for  coal,  whereas  his  usual  cost 
is  under  $3  and  to  the  housekeeper  who  checks  his  or  her  monthly  gro- 
cery, butcher  and  department  store  accounts.  The  high  cost  of  living, 
about  which  newspaper  paragraphers  love  to  dilate,  has  a  direct  relation 
to  the  lack  of  railroad  development.  And  back  of  this  insufficiency  of 
mileage  is  the  timidity  of  capital  and  back  of  this  timidity  of  capital  is 
the  reckless  and  dishonest  railway  management  of  an  earlier  era  and  the 
consequent  destructive  public  criticism  and  hostile  legislation. 

It  is  axiomatic  that  the  permanent  prosperity  of  the  nation  and  of 
business  in  general  can  not  be  disassociated  from  the  prosperity  of  the 
railways.  One  is  utterly  dependent  upon  the  other.  Prosperity  is  epi- 
demic in  America  today,  but  the  stabilization  of  railway  credit  is  as  far 
distant,  despite  prosperity,  as  it  was  in  the  lean  days  before  we  were  en- 
gulfed by  the  tidal  wave  of  foreign  gold. 

Just  as  good  wagon  roads  bring  reduced  operating  cost  to  the  farmer 
and  lowered  living  expenses  to  the  city  workman  so  highly  developed 
railways,  constantly  growing  and  expanding  with  the  country's  growth 
and  development,  will  bring  similar  and  larger  benefits  in  which  we  all 
shall  share. 

More  attentuated  remarks  from  the  temporary  chairman  might  have 
been  expected  and  relished,  but  I  have  deemed  it  wise  to  elaborate  fully 
the  diverse  issues  that  confront  us.  I  have  introduced  little  as  bearing  on 
the  needs  of  waterways  and  I  want  just  a  word  on  that  topic.  So  long  as 
the  great  newspapers  of  America — journals  like  the  Chicago  Tribune,  New 
York  Sun,  Boston  Herald,  Philadelphia  Ledger  and  others  equally  promi- 
nent— persist  in  associating  the  word  "pork"  with  the  canalization  of  our 
great  inland  water  carriers,  such  as  the  Ohio,  the  Mississippi  and  the  Mis- 
souri; so  long  as  they  connect  these  absolutely  worthy  plans  with  the  im- 
provement of  Bilious  Creek  and  Stickfoot  Lake,  just  so  long  we  shall 
have  a  popular  misconception  of  honest,  necessary — nay,  vital  projects, 
I  need  not  tell  you  that  the  popular  misconceptions  produce  no  construc- 
tive congressional  legislation  and  mighty  few  dollars  in  the  way  of 
appropriations. 

Cannot  Remain  Neutral 

The  business  interests  of  this  land  cannot  remain  neutral  and  uncon- 
cerned in  the  present  situation.  We  must  cease  being  commuters  on  the 
line  of  least  resistance.  If  politicians  are  to  be  the  pilots  of  the  trans- 
portation ship  they  will  steer  a  course  for  the  harbor  of  government  owner- 
ship. Siren  voices  will  sing  the  glories  of  that  calm  refuge  for  storm 
wrecked  ship  and  sailors.  If  we  are  wise  we  shall  follow  the  advice  of 
Circe  to  Ulysses  and  stop  our  ears  with  wax  to  avoid  the  enchanting  re- 
frain.     My  plea  today  is  that  you  gentlemen  who  honor     Evansville     by 


8  THE  CENTRAL  STATES  CONFERENCE 

your  presence  give  to  the  coming  speeches  and  debates  calm,  dispassionate 
attention.  Hear  each  and  every  side  before  you  pass  your  final  judg- 
ment. Whatever  your  present  emotional  bias,  and  I  fear  each  of  us  is 
conscious  of  some  emotion  and  some  bias,  I  urge  that  it  be  set  aside  and 
forgotten,  that  all  the  evidence  may  be  weighed  conscientiously  before  a 
verdict  is  rendered. 

My  fervent  hope  is  that  we  may  equal  the  expectations  of  Woodrow 
Wilson  and  by  the  attrition  of  many  minds  give  to  America  the  sensible, 
just,  progressive  and  sane  solution  of  our  transportation  problem. 

After  a  brief  discussion  among  the  delegates  concerning  the  order 
of  procedure,  Henry  C.  Murphy  was  elected  permanent  chairman  and 
Robert  Bonham  secretary  of  the  Conference.  The  delegates  then  voted 
unanimously  to  adopt  the  following  plan  of  procedure: 

1.  All  non-resident  participants  in  the  Conference  shall  register 
with  the  Secretary. 

2.  Only  registered  participants  and  members  of  the  Evansville 
Chamber  of  Commerce  shall  be  entitled  to  a  voice  and  vote  in  the  Con- 
ference proceedings. 

3.  The  order  of  business  shall  follow  the  printed  program  prepared 
for  the  Conference. 

4.  A  five  minute  limit  shall  apply  to  all  remarks  outside  the  pro- 
gram, unless  express  consent  be  given  by  the  Conference. 

5.  All  voting  shall  be  viva  voce  or  by  division. 

6.  The  Chairman  of  the  Conference  shall  appoint  a  committee  of 
eleven  on  resolutions  and  this  committee's  report  shall  come  up  for  dis- 
cussion at  the  afternoon  session  of  Friday,  December  15th. 

7.  All  resolutions  offered  must  be  in  writing  and  shall  be  referred 
by  the  Chairman  to  the  committee  on  resolutions  without  debate. 

The  Chairman  thereupon  introduced  Mr.  Alfred  P.  Thorn,  Counsel  for 
the  Railway  Executives'  Advisory  Committee  on  Federal  Legislation,  and 
General  Counsel  of  the  Southern  Railway,  alluding  to  him  as  one  of  the 
most  conspicuous  figures  now  before  the  public  in  connection  with  the 
transportation  problem. 

Mr.  Thorn  then  delivered  a  remarkable  address,  choosing  as  his  topic 
"The  Government  and  the  Railroads." 


THE  CENTRAL  STATES  CONFERENCE 

The  Government  and  the  Railways. 

By  Alfred  P.  Thorn 
Counsel  Railway  Executives'  Committee  on  Federal  Legislation 


Mr.  Chairman,  Mr.  Mayor,  and  gentlemen  of  the  Conference:  I  think 
it  is  a  matter  of  national  congratulation  that  there  has  been  wisdom  and 
initiative  enough  in  the  City  of  Evansville  to  bring  together  a  conference 
on  this  tremendous  question.  At  last  the  problem  of  transportation  has 
come  out  into  the  sunlight  of  public  consideration  and  discussion.  To  my 
mind  it  is  a  most  momentous  question  that  confronts  the  American  peo- 
ple. It  is  the  foundation  of  their  entire  commercial  and  social  life.  It  is 
the  means  by  which  communities  and  individuals  communicate  and  trade 
with  one  another.  It  is  the  one  thing  that  is  absolutely  essential  to  the 
greatness  and  the  glory  of  our  nation. 

I  have  no  doubt  from  things  that  have  come  to  me  from  time  to 
time  that  the  real  transportation  question  is  somewhat  obscured  by  the 
idea  that  it  means  questions  arising  out  of  the  Adamson  act.  That  is  a 
mere  incident  in  the  problem.  Long  before  the  recent  controversy  be- 
tween the  employers  and  the  employees  of  the  railroads  occurred,  the  more 
fundamental  questions  of  the  relations  of  government  to  the  railroads 
had  arisen,  and  President  Wilson  in  his  address  to  Congress  on  the  7th 
of  last  December,  a  little  more  than  a  year  ago,  brought  this  question 
prominently  to  the  attention  of  Congress  and  suggested  a  comprehensive 
study  of  the  whole  question  of  transportation  in  all  its  relationship,  so 
that,  "a  new  appraisement"  in  his  language,  might  be  had  of  the  twenty- 
nine  years  of  experience  of  regulation  in  this  country,  so  that  we  might 
readjust  our  views  in  any  matter  where  readjustment  was  necessary  in 
order  to  come  to  a  correct  solution  of  this  problem. 

In  defining  the  problem,  in  ascertaining  just  what  it  is  that  we 
have  to  do  with,  it  may  be  helpful  to  you,  as  it  has  often  been  helpful 
to  me,  to  review  to  a  certain  extent  the  history  of  governmental  regula- 
tion of  railroads  of  America.  At  the  outset  of  that  consideration  it  is 
necessary  for  us  to  bear  in  mind  the  contrast  between  the  systems  of  regu- 
lation adopted  by  the  government  in  respect  to  other  great  public  insti- 
tutions and  the  system  of  regulation  adopted  by  the  government  in  re- 
spect to  transportation. 

As  an  illustration  of  what  I  mean,  I  ask  your  attention  to  the  dif- 
ference between  governmental  regulation  as  applied  to  the  banking  sys- 
tems of  the  United  States  and  governmental  regulation  as  applied  to  the 
railways  of  the  United  States. 

The  system  of  regulation  of  banks  had  its  inception  when  the  banks 
had  their  inception.  It  was  created  as  a  part  of  a  system  which  was  to 
create  an  efficient  banking  system  for  all  the  people  of  America.  It  was  a 
part  of  a  great  constructive  work.  It  was  not  adopted  in  the  spirit  of  an- 
tagonism to  the  bank  nor  in  a  spirit  of  criticism,  nor  in  a  spirit  of  outrage 
coming  from  abuse;  but  it  came  as  a  natural  and  constructive  part  of 
building  up  a  banking  system  and  possessed  all  the  elements  necessary 
to  construct  a  system  which  would  create  adequate  commercial  banking 
facilities  for  the  people  of  this  country. 

The  history  of  regulation  as  applied  to  the  railsoads  is  just  the  con- 
trary. It  was  adopted  long  after  the  railroads  had  come  into  existence.  It 
was  not  a  part  of  an  entire  constructive  scheme.  The  railroads  had  not 
been  built  by  government.  They  had  not  been  organized  by  government. 
But  they  came  into  existence  as  a  result  of  private  enterprise  and  initia- 
tive. They  were  everywhere  welcome.  Subsidies  were  voted  for  them. 
The  most  liberal  charters  were  granted.  Land  grants  were  given  to  them, 
the   great  fundamental   and   controlling   public  purpose   being   to   obtain 


10  THE  CENTRAL  STATES  CONFERENCE 

them  as  a  means  of  intercommunication  between  men  and  communities. 
None  of  the  possible  abuses  had  then  appeared.  Every  public  purpose  was 
concentrated  upon  the  necessity  of  bringing  them  into  being  and  of  pro- 
viding the  inducements  essential  to  that  end. 

Now,  the  men  that  built  the  railroads  were  men.  They  had  human 
instincts  and  human  frailities  just  as  other  men  had;  and  the  result  of 
the  welcome  which  was  thus  given,  the  result  of  the  inducements  which 
were  thus  offered,  the  result  of  the  undeveloped  public  condition  of  public 
mind  in  respect  to  them  was  to  create  the  impression  upon  the  men  that 
built  those  railroads  that  they  were  building  and  were  owning  a  piece  of 
private  property.  That  is  not  to  be  wondered  at.  That  was  the  inevita- 
ble result  of  the  methods  which  were  adopted  and  of  the  encouragement 
that  was  given. 

Soon  after  this  matter  of  railway  transportation  passed  into  another 
stage.  The  use  of  these  great  properties  for  private  ends,  the  sale  of  their 
ser\aces  to  the  man  to  whom  the  sale  could  be  made  most  advantageously 
to  the  owner,  on  different  terms  at  wholesale  to  the  large  dealer  than  were 
given  at  retail  to  the  small  dealer,  the  exploiting  of  their  securities  on 
the  markets  for  the  private  purposes  of  the  owner,  all  these  things  were 
the  natural  outgrowth  of  the  conception  that  these  properties  were  private 
properties  just  as  other  private  property  was  private  property. 

But  as  time  progressed  it  became  apparent  that  the  power  of  con- 
trolling transportation  was  too  great  in  its  influence  upon  the  destinies 
of  communities  and  of  men  and  of  nations  to  be  permitted  to  go  uncon- 
trolled, that  the  possession  of  a  power  so  immense  that  it  made  and  un- 
made prosperity,  that  created  cities,  that  made  the  destinies  of  nations, 
should  not  be  left  in  the  hands  of  their  private  owners  unrestricted  by  the 
imposition  of  the  conception  of  a  public  obligation.  So  that  on  the  one  side 
there  still  was  the  conception  of  private  property  with  all  the  rights  of 
private  property  and  on  the  other  there  was  a  growing  conviction  that  a 
power  so  great,  with  consequences  so  immense,  should  not  be  left  in  the 
uncontrolled  possession  of  people  that  built  it. 

Now,  gentlemen,  we  have  all  come  to  see  that  the  public  conception 
of  these  instrumentalities  of  commerce  was  a  sound  one.  We  have  all 
come  to  see  that  no  other  conception  could  be  permanently  tolerated.  But 
that  did  not  prevent  a  bitter  fight  between  the  men  who  went  into  the 
enterprises  with  the  encouragement  and  belief  that  they  were  private 
enterprises  and  the  men  that  were  insisting  on  the  public  conception  of  a 
higher  obligation  to  the  whole  people. 

Rebates,  whereby  one  man  was  favored  over  another,  the  affording 
of  facilities  to  one  concern  and  the  denial  of  them  to  another,  favoring 
rates  to  certain  communities  which  were  denied  to  others,  all  were  abuses 
which  could  not  be  permanently  tolerated,  and  the  fight  for  a  system 
of  regulation  as  applied  to  the  railroads  was  a  fight  between  those  men 
who  wished  to  impose  the  public  conception  upon  the  private  owner  and 
the  private  owner  who  wished  to  resent  any  interference  of  his  supposed 
rights. 

The  battle  went  on  with  fierceness.  It  was  ultimately  won,  as  it 
was  inevitable  that  it  must  be  won,  by  the  sound  public  view  that  a  power 
so  immense  imposed  certain  public  obligations  which  must  be  recognized. 
But  when  the  question  of  imposing  a  system  of  regulation  came,  it  came 
with  a  demand  from  a  people  enraged  by  the  denial  of  just  rights,  by  the 
existence  of  far-reaching  abuses  and  the  terms  imposed  were  the  terms 
which  the  victor  imposes  upon  the  vanquished.  It  was  terms  of  regulation 
dealing  with  the  abuses  which  had  been  revealed,  and  dealing  with  them 
alone.  The  system  of  regulation  was  a  system  which  was  applicable  to  the 
removal  of  abuses  and  was  one  that  was  characterized  by  the  ideas  of 
correction,  of  punishment  and  of  repression. 

That  was  twenty-nine  years  ago.  The  public  in  making  this  regula- 
tion had  no  help  from  the  railroads,  because  they  went  down  as  the  van- 
quished in  the  fight.      But  the  thing  that  we  must  remember  is  the  Genesis 


THE  CENTRAL  STATES  CONFERENCE  H 

of  the  system  of  regulation  and  the  character  which  that  Genesis  neces- 
sarily gave  to  the  system  of  regulation.  Now,  the  question  before  the 
American  people  is  whether  a  system  of  governmental  regulation  can  be 
permanently  based  simply  upon  the  principles  of  repression  and  correc- 
tion or  whether  the  time  has  not  come  now  to  inquire  whether  the  prin- 
ciples of  encouragement  and  helpfulness  and  constructiveness  must  be 
introduced  into  it.   (Applause) 

I  realize  that  in  presenting  this  question  I  cannot  expect  from  Con- 
gress, nor  can  I  expect  from  the  American  people,  any  help  to  a  mere 
private  business.  I  have  no  more  right  in  representing  the  rairoads  to 
ask  special  privileges  of  government  than  any  of  you  gentlemen  have  to 
ask  special  privileges  of  government  in  respect  to  your  business.  I  realize 
that  any  proposal  I  shall  make,  in  any  suggestion  which  I  shall  bring  for- 
ward, I  must  consent  to  have  it  measured  by  the  public  interests,  and  if 
it  does  not  come  up  to  that  standard,  if  it  does  not  faithfully  measure  up 
to  the  public  interests,  then  it  must  be,  and  it  should  be,  discarded.  So 
that  in  nothing  which  I  shall  say  shall  I  ask  for  anything  on  private 
grounds,  but  all  will  be  based  upon  a  willingness,  at  least  upon  my  part, 
to  have  my  suggestions  measured  by  what  the  public  interests  and  the 
public  interests  alone  require.     (Applause) 

Now,  gentlemen,  let  us  see  what  the  public  interest  is.  What  is  public 
interest  in  respect  to  transportation?  Is  it  an  interest  primarily  or  prin- 
cipally in  respect  to  the  charges  of  transportation?  Are  you,  as  a  funda- 
mental question,  most  interested  in  the  charges  which  you  have  to  pay 
to  the  railroads?  That  is  a  legitimate  public  interest,  but  we  must  recog- 
nize that  the  existing  machinery  is  entirely  adequate  to  prevent  exorbitant 
charges,  that  there  is  no  demand  from  any  source  for  amended  instru- 
mentalities by  which  exorbitant  charges  shall  be  guarded  against.  Your 
Interstate  Commerce  Commission  has  power  amply  able  to  deal  with  any 
question  of  exorbitant  charges.  I  say  that  in  passing,  but  I  say  moreover 
that  your  principal  interest  is  not  in  regard  to  charges. 

Your  principal  interest  is  in  the  existence  of  means  of  commercial 
intercourse,  in  the  entire  adequacy  of  those  means  to  provide  for  your 
commercial  needs  and  in  the  fact  that  as  the  commercial  and  productive 
industries  of  this  country  grow  your  transportation  facilities  will  grow  to 
keep  pace  with  them. 

I  cannot  forget  that  I  was  present  in  the  last  day  of  August  at  a 
committee  meeting  in  the  capitol  at  Washington,  when  a  threatened  strike, 
nation-wide  in  its  extent,  menaced  the  continuance  of  railroad  transporta- 
tion in  America.  I  heard  no  talk  of  rates;  I  heard  no  talk  of  charges,  but 
I  saw  the  President  of  the  United  States  and  the  Congress  of  the  United 
States  busy  only  with  the  question  of  how  the  wheels  of  commerce  should 
be  kept  running  and  how  the  American  people  could  be  kept  supplied 
with  transportation  facilities. 

I  suppose  that  there  is  no  man  within  the  sound  of  my  voice  who  will 
deny  that  if  it  was  necessary  in  order  to  continue  the  instrumentalities  of 
transportation,  he  would  be  willing,  however  reluctant  he  might  be,  he 
would  at  last  make  the  choice  of  paying  double  the  amount  of  charges  in 
order  to  preserve  them.  The  question  with  America  is  not  the  rate  of  the 
charges,  but  the  question  of  the  continuance  and  adequacy  of  your  com- 
mercial instrumentalities.  Will  you  permit  me  to  digress  and  to  say  that 
in  no  move  that  we  are  making,  in  no  suggestion  that  we  are  bringing 
forward  to  Congress,  are  we  trying  to  get  increased  charges  as  a  result 
of  congressional  action.  Our  plea  to  Congress  is  not  that  it  shall  pass  a 
law  increasing  our  charges,  but  that  it  shall  perfect  the  instrumentalities 
of  regulation  so  that  when  the  time  comes  when  charges  should  be  in- 
creased or  should  be  decreased,  the  machinery  may  respond  promptly 
and  in  a  business-like  way  to  the  needs  of  the  situation. 

Is  there  nothing  to  alarm  the  American  people  about  their  transpor- 
tation facilities?  Has  nothing  occurred  to  arrest  their  attention?  Why,  let 
your  mind  revert  to  the  year   1907,  when  in  the  midst  of  the  greatest 


12  THE  CENTRAL  STATES  CONFERENCE 

commercial  movement  of  the  day,  there  was  a  sudden  panic  brought  on 
by  the  absolute  failure  of  the  railroads  to  be  able  to  transport  the  com- 
merce that  was  offered,  not  enough  tracks,  not  enough  cars,  not  enough 
yards,  not  enough  of  the  instrumentalities  of  transportation  to  carry  the 
commerce  that  was  offered  it.  There  was  precipitated  in  that  year  what 
is  known  as  a  panic  of  plenty. 

Last  year  it  was  found  necessary  to  set  an  embargo  upon  the  move- 
ment of  commerce,  especially  in  the  New  England  states,  and  so  great  was 
that  necessity  that  Commissioner  Clark  of  the  Interstate  Commerce  Com- 
mission went  with  a  number  of  gentlemen,  associated  with  him,  to  make 
a  study  of  the  situation  so  that  commerce  might  move;  and  notwithstand- 
ing the  effort  that  he  is  making  that  situation  has  not  yet  been  remedied, 
because  of  the  fundamental  lack  of  tracks,  the  fundamental  lack  of  yards, 
and  the  fundamental  lack  of  equipment. 

Just  now  as  I  speak,  the  commercial  capacity  of  America  is  crippled 
by  the  fact  that  there  is  a  shortage  pt  cars,  an  inability  to  carry  the  traf- 
fic. We  must  recognize  that  the  transportation  capacity  of  these  carriers 
sets  a  maximum  limit  upon  the  productive  and  commercial  capacity  of  the 
people,  because  a  people  can  not  and  will  not  produce  more  than  they  can 
get  to  a  market;  and  when  you  reduce  to  them  the  facilities  of  access  to 
market,  when  you  set  a  limit  upon  what  can  be  sent  to  market  you  set 
the  same  limit  upon  what  the  people  can  produce. 

So  I  shall  take  it  for  granted  that  the  prime  interest  of  the  American 
commercial  man  is  to  be  assured  of  an  adequacy  of  transportation  facili- 
ties and  to  be  assured  that  they  will  always  grow  to  keep  pace  with  the 
demands  of  his  business,  so  that  an  artificial  limit  shall  not  be  set  upon 
the  commercial  and  productive  capacity  of  America.  If  I  am  right  in  that 
then  I  can  define  an  issue  which  must  be  accepted  by  every  man  that  at- 
tempts to  debate  this  question,  and  that  issue  and  that  definition  is  this: 
Those  who  demand  a  change  in  present  governmental  regulation  must 
justify  that  demand  by  showing  that  such  a  change  is  necessary  to  the 
continued  efficiency  of  the  instrumentalities  of  commerce  in  America,  up 
to  the  public  needs  at  all  times.  And  those  who  oppose  a  change  must 
make  their  appeal  to  the  public  judgment  on  the  ground  that  no  change  is 
needed  in  order  to  assure  the  American  people  an  adequacy  and  a  suffi- 
ciency of  transportation  facilities.  Now,  I  appeal  to  you  for  a  moment  to 
pause  and  see  if  that  is  not  a  fair  statement  of  the  issues  that  ought  to  be 
debated  in  the  public  interest.  Those  that  demand  a  change  should  justi- 
fy their  demand  in  the  public  judgment  and  show  that  the  change  is  ne- 
cessary to  give  to  the  people  transportation  facilities  that  are  necessary 
to  their  needs.  And  those  who  oppose  any  change  must  justify  their  de- 
mand and  their  appeal  to  the  public  judgment  on  a  proposition  that  ex- 
isting conditions  do  assure  to  the  public  an  adequate  supply  of  transporta- 
tion facilities. 

Fortunately  for  us  in  that  debate  we  have  facts  to  which  we  may 
point  under  an  unchanged  system  of  regulation.  We  have  the  fact  which 
I  mentioned  a  moment  ago  of  a  panic  which  occurred  in  1907,  because  the 
facilities  were  not  adequate.  The  fact  of  the  embargoes  that  were  put 
upon  business  last  spring  because  the  transportation  facilities  were  in- 
adequate, the  fact  of  the  car  shortage,  which  is  even  now  stopping  the 
elevators  in  the  Interstate  Commerce  building  in  Washington  on  account 
of  lack  of  coal,  and  the  further  fact  referred  to  by  the  President  of  your 
Association  that  in  1916  there  was  less  construction  of  new  railroads  in 
the  United  States  than  in  any  year  since  1848,  leaving  out  the  years  of  the 
Civil  War,  being  less  than  one  thousand  miles.  There  are  further  facts 
in  our  recent  history.  Those  are  facts  which  the  men  interested  in  the 
development  of  the  business  of  America  should  bear  in  mind  in  consider- 
ing this  question.  That  new  construction,  the  practical  suspension  of  the 
building  of  railways  in  America,  comes  at  a  time  when  the  cost  of  living 
is  at  its  highest  point.  We  have  heard  one  political  party  after  another 
attempt  to  suggest  a  solution  of  this  cost  of  living.  You  heard  one  party 


THE  CENTRAL  STATES  CONFERENCE  13 

say  that  it  was  due  to  combinations  and  they  passed  the  anti-trust  laws. 
You  heard  another  party  say  that  it  was  due  to  a  high  tariff  and  they 
passed  a  low  tariff,  and  you  see  that  the  cost  of  living  has  mounted  stead- 
ily up,  notwithstanding  all  of  their  legislation.  What,  gentlemen,  about  the 
old  and  familiar  doctrine  of  supply  and  demand?  Why  not  try  to  in- 
crease your  supply  in  order  to  deal  with  your  cost  of  living?  Why  not  go 
into  the  untouched  resources  of  America,  to  the  new  fields  waiting  for 
the  plow  and  the  agriculturalist,  to  the  new  mines  waiting  for  the  pick  of 
the  miner,  to  the  new  forests  that  are  waiting  for  the  ax  of  the  lumber- 
man, in  order  to  bring  in  your  new  supplies  and  put  them  at  the  feet  of 
an  evergrowing  and  expanding  population?  And  yet,  notwithstanding  this 
rule  of  supply  and  demand,  notwithstanding  that  law  is  the  inexorable 
law  of  prices,  you  will  find  that  the  railroad  construction  of  this  country 
has  been  practically  suspended  and  there  are  no  new  fields  being  opened 
and  no  new  mines  and  no  new  forests.  Isn't  that  a  fact  to  attract  the  at- 
tention of  business  men,  of  all  men  who  are  anxious  to  have  a  solution 
of  what  is  a  public  and  a  national  problem?  Is  it  not  remarkable  that  al- 
though under  a  system  heretofore  existing  we  have  been  able  to  build 
260,000  miles  of  railroad  in  America,  that  all  of  a  sudden  the  desire 
of  the  investor  has  been  stopped,  his  investments  have  turned  in  other 
directions  and  the  expansion  of  the  railroad  system  throughout  the  coun- 
try has  been  arrested? 

Now,  what  is  the  cause  of  that?  What  is  the  cause  of  it?  You  will 
hear  those  gentlemen  who  advocate  that  no  change  be  made  proclaim  to 
you  that  the  cause  of  all  of  this  has  been  railroad  mismanagement  and 
financial  dishonesty  on  the  part  of  those  in  charge  of  the  railroads.  You 
will  hear  a  great  deal  about  the  Alton  case.  You  will  hear  a  great  deal 
about  the  Frisco  case  and  the  Rock  Island  case  and  the  New  Haven. 
They  will  tell  you  that  these  railroad  men  have  brought  the  situation  on 
themselves.  Now,  the  man  that  makes  that  argument  must  be  able  to 
provide  for  your  need,  for  future  securities  by  demonstrating  that  that  is 
the  cause  of  it.  If  that  is  not  the  cause  of  it,  if  he  is  unable  to  show 
that  it  is  the  cause  of  it,  he  introduces  simply  the  doctrine  of  hate,  the 
doctrine  of  public  condemnation,  the  doctrine  that  there  should  be  pun- 
ishment; but  he  has  solved  no  problem  of  the  future  . 

We  all  know  that  what  has  occurred  in  the  Alton  case  and  in  the 
Rock  Island  case  and  in  these  other  cases  has  been  ruthlessly  exposed 
by  existing  methods.  We  all  know  that  that  involves  not  ten  per  cent  of 
the  railroad  mileage  in  this  country.  And  we  all  know  that  in  every  pro- 
fession, in  banking,  in  mercantile  life,  among  lawyers,  among  physicians 
and  I  may  say  among  churchmen,  there  are  a  certain  percentage  of  men 
who  do  go  wrong.  But  we  do  not  abolish  commerce,  we  do  not  abolish 
the  profession,  we  do  not  abolish  the  churches;  we  try  to  do  the  thing 
that  will  make  them  a  more  useful  instrumentality  for  the  public  good. 

It  is  a  trying  thing,  gentlemen,  to  these  men  who,  engaged  in  the 
honest  purpose  of  building  up  and  doing  something  of  first  importance 
to  the  American  people,  to  find  themselves  at  every  turn  pointed  at  with 
a  finger  of  scorn  because  somebody  else  has  done  this  or  that.  If  the  rail- 
road management  of  this  country  is  as  a  whole  dishonest,  if  they  are  not 
to  be  trusted,  then  after  all  these  years  of  purification  it  has  been  demon- 
strated that  there  is  something  special  in  the  railroad  life  to  make  men 
dishonest  and  you  will  have  to  do  away  with  it  and  supplant  it  by  gov- 
ernment itself.  But  I  stand  before  you  and  proclaim  as  my  solemn  con- 
viction that  the  man,  the  prevailing  type  of  man  in  the  railroad,  is  just 
as  honest  as  the  prevailing  type  of  man  in  any  other  business  and  is  just 
as  full  of  purpose  to  do  a  good  work  for  the  public  as  any  other  man. 
(Applause) 

Now,  these  gentlemen  say,  "Now,  here  is  the  explanation  of  your  dif- 
ficulty." They  don't  say  to  remove  it  will  add  to  your  tracks  or  will  add 
to  your  cars  or  will  add  to  your  terminals,  but  let  us  look  for  a  moment 
as  to  that  contention.  On  the  one  hand  there  exists  these  cases  which  no 


14  THE  CENTRAL  STATES  CONFERENCE 

one  will  deny  and  which  no  one  will  defend.  But  let  me  ask  you,  one 
of  you  gentlemen,  to  come  up  here  as  an  investor,  and  you  look  on  the 
one  side,  on  all  of  those  abuses  that  have  been  talked  about,  but  what  do 
you  see  besides  that? 

You  are  asked  to  invest  in  a  railroad  security;  what  confronts  you? 
The  first  thing  that  you  see  is  that  your  revenues  are  beyond  your  own 
control,  that  the  amount  of  your  revenues  is  not  fixed  by  your  own  indus- 
try, by  your  own  initiative  or  by  your  own  genius,  but  they  are  prescribed 
and  limited  by  law.  That  is  the  first  thing  you  see.  Is  there  anything  in 
that  to  make  you  prefer  to  invest  in  that  business  rather  than  in  some 
business  where,  by  industry  and  by  economy  and  by  genius,  you  may  be 
able  to  increase  your  revenues  up  to  the  point  commensurate  with  your 
work?  Here  we  have  an  industry  where  the  revenue  level  is  settled,  not 
by  you,  the  investor,  not  under  your  control,  but  under  the  control  of  law. 
Is  that  an  encouraging  condition?  You  find  that  it  is  not  only  controlled 
by  law,  but  it  is  controlled  by  forty-nine  different  instrumentalities  who 
can  have  an  effect  upon  your  revenues,  not  by  one  body  with  a  large, 
comprehensive  view  of  the  whole  American  field  and  its  needs,  but  by 
forty-nine  bodies,  one  federal  and  forty-eight  states,  unco-ordinated  with 
different  policies,  with  differing  outlooks,  with  different  ideals,  all  able  to 
put  a  restriction  upon  the  amount  of  your  earnings.  Now,  is  that  a  thing 
that  will  induce  you  to  believe  that  a  railroad  is  a  first-class  investment? 

But  let  us  turn  to  the  other  side.  What  about  your  expense  account? 
Can  you  control  your  expense  account?  Why,  the  big  bulk  of  your  expense 
account  is  created  by  labor  unions.  Your  expense  account  is  affected  by 
the  requirements  of  public  bodies  for  investment  in  non-revenue  pro- 
ducing sources  of  expense,  I  mean  non-revenue  producing  additions  to 
your  plant.  You  can  be  required  to  build  handsome  stations.  You  can  be 
required  to  separate  grades.  You  can  be  required  to  put  extra  crews  upon 
trains.  You  can  have  your  expenses  made  for  you.  not  by  your  own  idea 
of  what  your  business  requires,  but  by  law,  and  not  by  the  law  of  one 
body,  with  one  outlook,  but  by  forty-nine  different  law  making  bodies. 

There,  you  have  your  revenue  side  and  your  expense  side  beyond 
your  control,  your  revenue  side  beyond  your  control,  and  your  expense 
side  beyond  your  control.  Now,  Mr.  Investor,  what  do  you  see  in  that 
situation  to  attract  you  into  a  railroad  investment?  But,  is  that  all  you 
see? 

You  see  an  application  made  to  one  of  these  regulating  bodies  in 
one  of  your  states,  not  far  from  here,  and  the  commission  grants  it;  and 
the  history  of  that  state  is  that  every  time  the  commission  grants  an 
increased  rate  there  is  a  bill  introduced  in  the  legislature  of  that  state 
to  abolish  the  commission.  So  that  you  haven't  a  fair  show,  a  fair  busi- 
ness show  for  consideration  of  the  question  of  whether  you  ought  to  have 
additional  revenue.  Politics  comes  in  and  politics  threatens  the  body  that 
passes  on  your  proposal  with  being  abolished  in  case  it  passes  on  it  in 
favor  of  increased  revenue. 

But  that  is  not  all  that  occurs.  The  Interstate  Commerce  Commission, 
after  long  consideration  and  after  a  few  hearings,  increased  rates  in  what 
is  known  as  the  Shreveport  rate  case,  and  what  was  the  effect?  Two  im- 
portant senators,  two  men  that  appeal  especially  to  the  progressive  senti- 
ment of  America,  arose  on  the  Senate  floor  and  denounced  the  Interstate 
Commerce  Commission  for  having  granted  that  measure  of  relief.  Now, 
I  will  ask  this  investor  again,  who  can't  control  either  his  revenue  or  his 
expenses,  but  who  when  he  makes  a  case  before  one  of  these  bodies  that 
does  control  his  revenues,  finds  that  body  the  subject  of  attack  of  a  most 
influential  character  among  the  law-making  bodies  on  which  that  body 
is  dependent.  Now,  is  there  anything  encouraging  in  that,  to  make  a  man 
come  and  put  his  money  into  railroads? 

But,  there  is  another  thing  to  which  I  would  like  to  call  your  at- 


THE  CENTRAL  STATES  CONFERENCE  15 

tention  as  bearing  upon  the  conclusion  that  will  be  reached  by  Mr.  In- 
vestor when  confronted  by  this  question.  Every  man  of  you  who  owns  a 
piece  of  property  knows  that  you  cannot  borrow  the  whole  value  of  it  on 
that  property,  that  the  desirability  of  the  loan  depends  upon  the  margin 
that  is  left  in  value.  In  other  words,  there  is  a  recognized  line  of  safety 
between  the  amount  of  borrowed  money  that  a  man  should  get  into  his 
business  and  the  amount  he  should  contribute  himself.  Now,  the  railroad 
bond  represents  money  borrowed  and  represents  a  fixed  charge.  The  rail- 
road stock  represents  money  put  in  by  the  owner  and  it  does  not  involve 
a  fixed  charge.  Now,  there  is  a  line  of  safety  as  to  how  much  of  the  capital 
of  a  railroad  ought  to  be  contributed,  ought  to  be  obtained  through  mort- 
gages and  fixed  charges  and  how  much  ought  to  be  obtained  through 
stock.  Some  men  say  that  line  of  safety  is  fifty  and  fifty.  Some  men  say 
that  the  railroads  can  stand  a  fixed  charge  of  sixty  per  cent  of  their  in- 
debtedness, if  forty  per  cent  is  contributed  in  the  way  of  stock.  I  have 
heard  no  man  say  that  forty  per  cent  is  too  little  to  have  coming  from 
the  stockholder  in  order  to  make  the  bond  a  staple  investment. 

Now,  what  has  been  the  history  of  railroads  in  that  respect?  In  19  00 
the  amount  of  railroad  capital  secured  through  bonds  was  a  trifle  less  than 
fifty  per  cent.  It  was  forty-nine  and  a  fraction,  fifty  and  a  fraction  being 
contributed  through  stocks.  In  1914  the  amount  contributed  through 
bonds  had  increased  to  over  sixty-one  per  cent;  and  in  1916  it  is  sup- 
posed to  have  increased  to  sixty-five  per  cent.  So  that  in  the  sixteen  years 
since  1900,  there  has  been  a  growth  in  the  amount  that  was  contributed 
through  fixed  charges  of  one  per  cent  a  year,  or  sixteen  per  cent,  and 
today  the  American  railways  are  confronted  with  the  narrow  margin  of 
thirty-five  per  cent  only,  where  the  line  of  safety  ought  to  at  least  be 
forty  per  cent,  and  some  people  think  sixty  per  cent.  When  you  ask 
the  investor  to  invest  his  money  in  that  he  is  confronted  with  this  dis- 
appearing line  of  safety  and,  with  its  recession  beyond  the  point  where 
it  is  any  longer  considered  a  line  of  safety. 

But  more  than  that  is  he  confronted  with?  He  is  confronted  by  the 
fact  that  he  can  go  into  other  lines  of  investment  which  are  not  sub- 
ject to  these  governmental  vicissitudes  and  get  greater  security  and  larger 
returns  which  are  more  attractive  to  him. 

So  much  is  that  the  case  that  there  are  whole  sections  in  this  coun- 
try that  really  contribute  little,  if  any,  of  their  credit  to  support  their 
transportation  systems.  Take  my  own  portion  of  the  country,  which  is  the 
South.  Recently  we  were  able,  through  the  income  tax  returns,  to  trace 
the  ownership  of  a  block  of  $100,000,000  of  bonds  of  one  of  our  railroads 
running  through  the  South,  touching  the  South  at  every  vital  point.  But 
three  and  a  half  per  cent  of  them  were  held  in  the  South,  ninety-six  and 
one-half  per  cent,  being  contributed  by  the  credit  of  other  portions  of  the 
country.  So  that  railroad  securities  are  not  a  favorite  at  the  South  and 
the  South  gives  little  of  its  credit  to  supply  the  transportation  facilities 
of  the  country.  The  same  is  true,  I  am  told,  in  a  less  degree  of  the  West, 
that  the  western  people  as  a  rule  make  their  investments  in  other  things 
than  railroads.  At  one  time  you  could  go  to  Europe,  but  Europe  has  re- 
cently sent  back  from  three  to  five  billions  of  our  securities  which  have 
been  resold  in  America  and  they  had  to  be  absorbed  here;  and  after  the 
war  Europe  will  be  a  borrower  instead  of  a  lender.  They  must  build  up 
their  own  waste  places.  They  will  have  need  not  only  for  all  their  own 
capital,  but  for  all  that  they  can  borrow.  They  will  not  be  sending  their 
money  here  to  help  build  railroads  in  America.  So  we  have  a  reduced 
territory,  only  a  little  section  of  the  country  which  we  may  denominate  the 
East  from  which  the  money  has  to  come  to  supply  North  America  with  its 
railroad  facilities. 

Now,  is  there  nothing  in  that  to  attract  your  attention  as  business 
men,  dependent  on  these  railroads  for  your  opportunities  of  commercial 
growth? 


16  THE  CENTRAL  STATES  CONFERENCE 

I  don't  mean,  gentlemen,  I  don't  mean  that  first-class  railroad  se- 
curities already  on  the  market  do  not  sell  well.  They  do.  But  you  are  not 
Interested  in  that.  I  am  not  interested  in  that.  What  we  are  interested  in 
Is  how  is  the  new  money  to  come,  and  when  we  get  to  the  question  of 
new  money  we  must  consider  the  margin  of  security  that  is  left.  We  must 
consider  that  the  line  of  safety  has  already  been  past  and  there  is  now 
no  possibility  of  financing  these  railroad  companies  through  selling  stock 
and  raising  the  line  of  safety. 

Now,  gentlemen,  it  is  estimated  that  in  order  to  make  a  stock  salable 
at  par  there  must  be  an  earning  capacity  of  six  per  cent  with  a  surplus  of 
three  per  cent,  to  make  up  for  during  the  lean  years.  Do  you  know  that 
measured  according  to  that  rule,  there  are  but  thirty-nine  railroads, 
having  a  mileage  of  47,363  miles,  which  could  probably  be  financed  by 
the  issue  of  stock  at  par?  Under  this  test  137  railroads,  having  a  mileage 
of  about  185,000  miles,  could  not  be  financed  by  the  issue  of  stock  at  par. 
Now,  that  is  a  railroad  problem.  We  have  got  to  get  new  money.  We  are 
trying  to  estimate  how  much  new  money  the  railroads  will  need  in  the 
next  ten  or  fifteen  years.  We  can  only  do  that  by  the  past.  We  see  that 
commerce  has  grown,  that  productiveness  has  grown  in  America  eight 
and  nine  per  cent  a  year  during  that  time,  for  the  last  twenty  years.  The 
railroad  facilities  at  the  moment  are  no  more  than  necessary  for  what  the 
commerce  of  the  country  needs  today  and  if  that  is  to  be  extended  to  carry 
this  eight  or  nine  per  cent.,  additional,  you  must  add  eight  or  nine  per 
cent,  to  them,  with  the  result  that  there  will  be  needed  during  the  next 
ten  j'ears  for  railroad  construction  in  America,  unless  a  limit  is  to  be  put 
on  your  commercial  activities,  and  your  productiveness,  about  $1,250,000,- 
000  a  year.  It  will  be  necessary  to  refund  maturing  obligations,  some 
$250,000,000.  So  that  it  is  no  exaggeration  to  say,  unless  the  productive 
capacity  of  America  is  to  be  limited,  that  there  ought  to  be  $1,500,000,000 
a  year  spent  on  these  railroads  for  the  next  ten  years. 

Now,  where  is  that  money  coming  from?  Is  it  not  fair  to  ask  of  a 
system  of  regulation  Avhich  limits  revenues  and  does  not  limit  expenses, 
where  that  amount  of  money  is  to  come  from?  We  say  it  is  to  come  from 
the  introduction  into  your  system  of  governmental  regulation  all  the 
qualities  of  encouragement  and  helpfulness  so  that  a  man  will  be  sure  of 
governmental  friendship  when  he  puts  his  money  into  this  vital  enter- 
prise.  (Applause) 

The  experiment  that  we  are  willing  to  make  gives  to  you  and  yours 
assurance  when  you  put  your  new  money  into  these  enterprises  that  you 
will  be  confronted  by  a  governmental  attitude  of  cordiality  and  friendship 
and  not  by  a  governmental  attitude  of  distrust,  of  detection,  of  correction 
and  repression.  Will  you  put  your  money,  you  gentlemen,  you  who  are  the 
American  public,  will  you  put  your  money  in  these  enterprises  unless 
you  are  assured  of  fair  governmental  treatment  of  business  and  not  poli- 
tical treatment? 

Now,  the  time  for  my  train  is  nearly  here  and  I  have  only  a  brief 
opportunity  of  outlining  the  suggestions  which  we  think  are  wise.  In  the 
first  place  we  think  that  commerce  has  become  a  national  thing  in  Amer- 
ica. Eighty-five  per  cent,  of  your  business,  and  by  that  I  mean  the  busi- 
ness of  all  the  American  continent,  is  interstate  business.  Ninety-three 
per  cent,  of  Indiana's  business  is  interstate  business.  Ought  the  system 
of  regulation  rcognize  that  fact?  Ought  it  to  be  the  power  of  any  state 
to  break  down  the  instrumentalities  of  interstate  commerce  or  to  deter- 
mine its  standard  of  usefulness  and  efficiency? 

Let  me  give  you  an  illustration  of  something  that  is  going  on.  Here 
are  two  states,  the  states  of  New  Jersey  and  Pennsylvania,  who  have 
adopted  what  is  known  by  some  people  as  the  full-crew  law  but  what  is 
called  by  the  railroad  people  the  extra-crew  law.  The  cost  of  the  law, 
of  complying  with  that  law  by  the  railroads  running  through  those  states, 
is  $1,700,000  a  year.     Those  same  railroads  run  through  the  states  of  New 


THE  CENTRAL  STATES  CONFERENCE  17 

York,  of  Ohio,  of  Indiana,  of  Illinois,  of  Maryland,  of  Delaware,  and  West 
Virginia.  None  of  these  other  states  have  adopted  the  policy  of  the  full- 
crew  law.  Now,  $1,700,000  a  year  is  interest,  at  five  per  cent,  a  year,  on 
a  capital  fund  of  $34,000,000.  Is  there,  any  more  right  in  New  Jersey 
and  Pennsylvania  to  impose  that  burden  than  there  is  in  Indiana  and  Illi- 
nois to  do  it?  And  yet  the  commerce  of  Indiana  and  Illinois  and  of  Ohio 
and  New  York  and  these  other  states  has  to  bear  the  burden  of  that 
charge  that  is  put  upon  their  interstate  carriers  by  these  two  states.  If 
you  regard  it  from  the  standpoint  of  a  capital  fund  of  thirty-four  million 
dollars  which  could  be  applied  to  the  purchase  of  new  equipment  and  the 
laying  of  double  tracks  and  to  the  establishment  of  larger  yards  and 
terminals,  then  by  the  act  of  those  two  states  a  capital  fund  of  thirty- 
four  millions  of  dollars  has  been  withdrawn  not  only  from  their  own  uses 
but  from  the  uses  of  these  other  states  by  a  policy  which  these  other 
states  have  never  yet  approved  in  a  legislative  way.  Now,  is  that  a  power 
which  should  be  possessed  by  any  one  of  the  states,  to  put  a  burden  like 
that  on  a  sister  state? 

Let  us  take  another  illustration.  Here  is  Illinois.  Illinois  has  a  law 
which  requires  that  no  railroad  shall  issue  any  securities  without  the  ap- 
proval of  its  commission  and  even  if  it  is  approved  that  there  shall  be 
a  tax  of  one  dollar  per  thousand  to  the  state  of  Illinois  for  that  approval. 
Now,  here  is  the  New  York  Central  railroad  running  from  New  York 
through  that  state  and  through  Ohio  and  Indiana  and  into  Illinois  to  a 
less  extent  than  into  any  of  the  other  states.  In  their  recent  organization 
they  had  to  go  to  that  body  for  permission  to  issue  their  securities  and 
they  gave  their  permission  and  they  put  upon  that  railroad  a  charge,  a 
tax  of  six  hundred  thousand  dollars  for  doing  it.  Now,  why  shouldn't 
Indiana  have  put  on  that  charge?  Why  shouldn't  Ohio  have  done  it  and 
New  York?  They  each  have  more  of  the  property  in  them  than  Illinois 
has  in  it  of  that  railroad.  And  if  they  had  done  it  here  would  have  been 
a  tax  charge  on  the  issue  of  those  securities  so  immense  that  the  issue 
would  have  been  impossible.  Because  they  did  not  do  it  their  commerce 
must  help  to  pay  that  bill  to  the  state  of  Illinois.  Now,  is  that  right?  Is 
that  a  helpful  principle  of  law?  I  have  not  time  to  give  you  an  infinite 
fliumber  of  illustrations,  but  I  will  give  you  just  a  few  more. 

Here  is  Texas.  Texas  has  adopted  a  system  of  rates  for  the  purpose 
of  controlling  its  own  market  to  its  own  jobber.  And  here  is  the  state 
of  Louisiana  across  the  way  that  wants  to  get  into  the  Texas  market,  and 
they  find  the  interstate  rates  higher  than  the  intra-state  rates  in  Texas 
and  they  cannot  trade  there.  Then  they  have  a  fight  over  that  proposi- 
tion. The  Interstate  Commerce  Commission  determined  that  that  is  un- 
lawful. A  bill  is  introduced  in  the  senate  of  the  United  States  to  abolish 
the  doctrine  of  the  Interstate  Commerce  Commission  which  has  been  af- 
firmed by  the  supreme  court  and  directly  a  contest  arose  in  the  senate 
over  the  matter.  Texas  through  its  representatives,  Louisiana  through  its 
representatives,  were  arguing  back  and  forth  and  in  a  little  while  it  was 
developed  that  while  Louisiana  was  attempting  to  get  into  Texas  markets, 
Natchez,  Mississippi,  was  being  held  out  of  Louisiana  markets;  and  Sen- 
ator Reed  of  Missouri  came  into  the  hearing  to  protest  in  the  name  of  St. 
Louis  against  the  laws  of  Illinois  which  sought  to  build  up  East  St.  Louis 
and  sought  to  exclude  St.  Louis  from  Illinois  territory.  Through  Senator 
Reed  came  the  further  complaint  from  Missouri  that  Kansas  City,  Mis- 
souri, was  being  excluded  from  Kansas  and  Oklahoma  in  favor  of  Kansas 
and  Oklahoma,  territory,  and  then  from  my  own  section  Senator  McKellar 
came  up  from  Memphis  and  complained  that  the  state  of  Arkansas  was 
preventing  the  Memphis  merchants  from  trading  in  Arkansas.  Now,  that 
is  another  one  of  the  situations. 

The  New  York,  New  Haven  &  Hartford  railroad  operating  in  the  New 
England  states,  recently  proposed  an  issue  of  $67,000,000  of  bonds  to  re- 
fund a  number  of  short  term  notes,  and  to  provide  in  addition  a  fund  of 


18  THE  CENTRAL  STATES  CONFERENCE 

$25,000,000  to  be  used  in  the  purchase  of  enlarged  terminals,  more  equip- 
ment and  better  facilities  to  be  used  in  public  service  .The  state  of  Rhode 
Island  gave  its  approval;  the  state  of  Connecticut  gave  its  approval,  but 
when  the  state  of  Massachusetts  was  reached,  although  its  commision 
approved  of  what  ought  to  be  done,  it  was  found  that  the  laws  of  Massa- 
chusetts forbade  that  issue,  so  that  the  proposed  improvement  could  not 
be  carried  out,  and  we  see  the  effect  today  in  the  congestion  and  delays 
in  the  handling  of  traffic  which  are  impeding  the  commerce  of  New  Eng- 
land. 

Now,  gentlemen,  when  we  consider  what  brought  about  this  govern- 
ment we  can  see  that  we  are  running  counter  to  the  whole  constitutional 
purpose  of  our  government  by  submitting  to  such  a  situation  as  this.  After 
the  revolution,  when  the  question  of  the  adoption  of  a  constitution  in  this 
country  was  being  considered,  it  was  found  that  the  various  states  of  the 
Union,  through  their  own  inability  to  control,  to  pass  export  laws  and  im- 
port laws,  were  excluding  the  commerce  of  their  sister  states.  Virginia, 
by  imposing  a  big  export  tax,  was  keeping  her  product  at  home.  North 
Carolina  was  doing  the  same.  Maryland  was  doing  the  same;  and  New 
York,  by  a  prohibitory  import  tax,  was  preventing  the  New  Jersey  peo- 
ple from  trading  in  the  markets  of  New  York,  and  Connecticut  from  bring- 
ing its  fire  wood  there,  and  Rhode  Island,  the  great  port  of  the  country 
at  that  time,  was  paying  the  whole  state  government  expense  by  import 
duty  on  goods  intended  for  shipment  to  other  states.  And  there,  gentle- 
men, arose  also  a  great  historic  question  involving  this  territory.  The 
question  was,  what  should  become  of  the  great  northwestern  territory. 
There  was  England  on  the  north  anxious  to  alienate  the  affections  of  the 
settlers  in  this  northwestern  territory  by  close  commercial  bond  with 
England;  and  there  was  Spain  on  the  south  attempting  to  do  the  same 
thing.  General  Washington  came  forward  and  said  that  the  only  way  on 
earth  to  hold  the  affections  of  these  western  people  was  to  assure  them 
free  trade  among  the  states  so  that  they  would  not  be  called  upon  to  pay 
import  duties  to  the  states  on  the  Atlantic  coast,  but  that  there  should  be 
quality  of  ports  and  that  there  should  be  free  trade  so  that  these  people 
would  not  be  taxed  beyond  their  endurance  and  their  allegiance  go  to  Eng- 
land on  the  north  or  to  Spain  on  the  south.  So  that  these  facts  were  the 
inspiration  of  the  constitution. 

The  states  derived  immense  advantages  from  the  constitution.  They 
acquired  immense  rights  by  getting  into  the  Union.  Too  much  effort 
has  been  made  to  talk  about  the  reserved  rights  of  the  states.  Let  us 
think  for  a  moment  of  the  acquired  rights  of  the  states.  Did  Indiana  not 
obtain  a  valuable  advantage  when  it  obtained  the  right  to  have  one  en- 
tire and  consistent  postoffice  system?  Is  that  not  a  state  right  of  Indiana? 
Did  not  New  York  obtain  a  tremendous  right  for  the  state  when  it  ob- 
tained the  right  to  ask  that  the  whole  power  of  this  nation  should  be 
Jbrought  there  to  defend  it  from  the  invader  and  to  throw  him  from  her 
shores,  and  that  the  defense  of  each  state  should  be  undertaken  by  the 
national  power?  Did  each  state  not  acquire  a  tremendous  right  when  it 
acquired  a  right  to  equality  of  ports  in  this  country,  so  that  there  should 
not  be  import  duties  put  upon  their  commerce  that  would  be  burden- 
some? Did  each  state  not  acquire  a  tremendous  right  when  it  acquired 
the  right  to  a  uniform  tariff  at  that  time  throughout  the  Union?  Side 
by  side  with  those  acquired  rights  there  was  placed  in  the  constitution  the 
provision  that  the  national  government  should  regulate  and  control  in- 
terstate and  foreign  commerce,  and  that  is  a  right  of  the  states  as  valuable 
as  these  others  I  have  mentioned  and  as  sacred.  So  when  we  appeal  for 
an  instrumentality  that  will  be  co-extensive  with  the  limits  of  the  nation 
and  with  the  avenues  of  commerce,  to  take  a  broad  and  comprehensive 
view  of  the  needs  of  all  the  people,  to  regulate  commerce  as  en  entire 
thing  and  according  to  commercial  needs.  We  are  not  contending  for  a 
denial  of  state  rights,  but  for  an  assertion  of  one  of  the  greatest  and  most 
valuable  rights  of  the  states.     And  let  me  call  your  attention,  gentlemen. 


THE  CENTRAL  STATES  CONFERENCE  19 

to  the  facts  that  those  who  oppose  it  will  not  be  able  to  sustain  themselves 
upon  any  economic  or  commercial  ground,  but  they  must  appeal  to  some 
political  prejudice,  a  prejudice  which  has  no  part  in  the  determination  of 
this  business  question,  and  the  fact  that  it  is  injected,  the  fact  that  it  is 
relied  upon  is  one  additional  deterent  circumstance  to  prevent  the  in- 
vestor from  being  satisfied  with  his  investment. 

Gentlemen,  I  find  that  my  time  has  about  expired.  Unfortunately 
for  my  cause  and  for  my  ability  to  place  it  before  you,  there  was  a  limita- 
tion of  time  put  upon  me  by  the  time  that  I  have  to  go  to  a  meeting  at 
another  point.     I  would  be  glad  to  show  you  all  that  we  propose. 

In  a  word  we  propose  that  there  shall  be  one  comprehensive  and  wise 
regulating  authority  whose  powers  shall  be  coextensive  with  the  whole 
power  of  interstate  commerce  and  that  we  shall  not  be  subjected  to  loose 
regulation,  but  that  we  shall  be  subjected  to  consistent,  homogeneous 
and  one  regulation,  a  regulation  that  will  recognize  the  needs  of  com- 
merce and  in  consequence  recognize  the  needs  of  commercial  instrumen- 
tality. We  ask  that  our  securities  before  they  are  issued  shall  be  safe- 
guarded by  the  approval  of  the  Interstate  Commerce  Commission,  but 
that  when  that  approval  is  given  we  need  not  have  to  go  to  forty-eight 
or  ten  other  governmental  bodies  in  order  to  obtain  their  approval.  We 
ask  for  one  consistent,  homogeneous,  wise  and  American  system  of  regu- 
lation.     (Applause.) 

Prolonged  and  enthusiastic  applause  followed  the  address  and  a 
vote  of  thanks  was  ordered  for  Mr.  Thorn.  With  the  conclusion  of  a  dis- 
cussion lasting  15  minutes,  during  which  Mayor  Bosse,  C.  C.  Gilbert  of 
Tennessee,  R.  L.  McKellar  and  E.  V.  Knight,  of  Kentucky,  were  heard, 
the  Conference  adjourned  until  2  p.  m. 

THURSDAY  AFT^ERXOON  SESSION. 
Dec.  14,  1916. 

After  introducing  the  next  speaker,  Mr.  John  Muir,  of  New  York 
City,  President  of  the  Railway  Investors'  League,  the  chairman  invited 
Mr.  Wilbur  Erskine,  President  of  the  Evansville  Chamber  of  Commerce, 
to  take  the  chair. 

Mr.  Muir  then  spoke  on  the  subject  "Investors  the  Real  Railroad 
Owners." 


20 


THE  CENTRAL  STATES  CONFERENCE 


Investors  the  Real  Railroad  Owners. 


John    Muir    Shows    How    Public    Now    Chiefly    Owns   Lines— Have    Remedy   If 

Protected. 


The  first  address  of  the  second 
session  of  the  conference  Thursday 
afternoon  was  by  John  Muir,  chnirman 
of  the  Railway  Investors'  league.  His 
subject  was  "The  Real  Owner  of  the 
Railroads — the  Investor.  Why  he  is 
worried  over  the  present  situation  and 
how  fair  treatment  will  induce  him  to 
supply  a  solution  of  present  American 
transportation  problems."  Mr.  Muir 
said: 

Any  discussion  on  the  subject  of  rail 
and  water  transportation  or  any  sound 
analysis  of  the  present  condition  of 
American  transportation  cannot  be 
complete,  cannot  secure  effective  rem- 
edies without  the  participation  of  the 
real  owners  of  the  railroads — the  in- 
vestors. 

Quietly,  but  with  a  steadiness  which 
has  accomplished  marvelous  results, 
there  has  been  going  on,  for  the  past 
ten  years,  with  cumulative  force,  the 
persistent  absorption  of  railway  stocks 
and  bonds  of  the  leading  railway  sys- 
tems of  the' country  by  the  man  of  mod- 
erate means,  the  small  investor. 

Starting  with  the  1907  panic,  known 
in  "Wall  street  as  the  "Rich  Man's 
Panic,"  there  has  been  a  steady  and 
rapid  increase  in  the  individual  num- 
ber and  amount  of  securities  held.  The 
result  has  been  that,  whereas  in  1901 
many  leading  railroads  were  owned 
by  a  few  hundred  or  at  most  thousands 
of  investors,  now  men  (and  women, 
too)  with  moderate  amounts  of  money 
who  were  impressed  with  the  oppor- 
tunity to  secure  liberal  and  permanenet 
income  are  the  chief  owners.  Coinci- 
dent with  the  opportunity,  there  devel- 
oped, among  financial  houses,  firms 
specializing  in  service  to  the  small  in- 
vestor, firms  which  studied  his  needs, 
catered  to  his  wants,  selected  with  care 
the  security  desired,  whether  a  single 
share  of  stock  or  a  single  hundred  dol- 
lar bond.  And  what  is  now  the  result? 
Listen  to  this  short  array  of  official 
figures  as  to  number  of  stockholders 
given  out  by  the  larger  railroad  sys- 
tems: 

Atchison     1901,     1,300  today,  45,000 

Pennsylvania. 1901,  27,000  today,  94,000 

C,  M.  &  St.  P.1901,     5,000  today,  17,000 

Gt.  Northern  .1901,     1,700  today,  25.000 

B.  &  0 1901,     3,200  today,  27.000 

Sou.    Pacific. 1901,     1.500  today,  33.000 
and  so  on  down  the  list. 


The  New  Wall  Street 

And  let  me  state  right  here  a  word 
for  Wall  street.  I  have  a  right  to  say 
it,  because,  first,  I  am  a  railroad  man 
of  extensive  western  traffic  experi- 
ence, and,  second,  because  today  and 
for  the  past  twenty  years,  I  have  had 
practical  experience  in  Wall  street  with 
the  hydra-headed  and  hard-headed 
small  investor.  Wall  street  has  changed 
very  much  during  the  past  ten  years. 
Many  houses  now  have  thousands  of 
customers,  where  houses  doing  a  larger 
business  have  only  hundreds.  This  is 
due  to  the  immense  detail,  the  careful 
painstaking  work  required,  to  meet  the 
needs  of  the  small  investor.  Wall  street 
is  no  longer  a  gambler's  paradise.  It  is 
a  section  of  hard  work,  devoted  to  re- 
search to  obtain  facts  and  informa- 
tion to  guide  the  thrifty,  how  and  what 
to  buy.  It  is  to  Wall  street  earnest 
minded  people  come  with  their  savings 
to  buy  in  small  quantities  securities 
representing  the  best  lines  of  transpor- 
tation in  the  country. 

During  this  period  of  increasing  pop- 
ular participation  in  investment,  I  have 
been  actively  interested  in  the  work, 
and  I  know  whereof  I  speak,  but  my 
experience  previously  was  distinctly  in 
the  railroad  field.  I  think  I  can  pre- 
sent evidence  entitling  me  to  member- 
ship among  the  railroad  men  who  help- 
ed build  up  the  middle  and  far  West. 

Some  Past  Experience 
I  am  presenting  this  evidence  in  order 
to  anticipate  the  objection  which  we 
are  all  likely  to  cite  when  anotiier  fac- 
tor intrudes  in  a  discussion  which  we 
have  come  to  consider  limited  to  a  cer- 
tain class  of  debaters.  So  please  ab- 
solve me  of  any  charge  of  egotism 
when  I  say  that  forty  years  ago  I  was 
general  freight  agent  of  the  Kansas 
Pacific  railway,  the  only  trunk  line  of 
Kansas  running  from  the  Missouri  river 
to  the  Rocky  mountains.  I  saw  Kan- 
sas emerge  from  her  scourging  by 
grasshoppers  and  drought  to  a  state  of 
continuous  rich  crops  and  plenty. 
Thence  I  went  to  the  great  Northwest 
Pacific  coast,  ^vhere  existed  a  compli- 
cated transportation  system  of  river, 
rail,  ocean  and  sound.  I  transformed 
the  measurement  basis  of  transporta- 
tion charge  to  that  of  weight.  The  rate 
on  a  horse,  for  instance,  was  reached 
by  measuring  from  the  tip  of  his  nose 
to  the  end  of  his  tail   (we  didn't  allow 


THE  CENTRAL  STATES  CONFERENCE 


21 


or  cropped  tails)  and  charged  on  the 
lasis  of  40  cubic  feet  per  ton  of  space 
ccupied.  On  the  completion  of  the 
Northern  Pacific  railroad,  I  became 
raffic  manager  of  the  new  transconti- 
lental  line,  which  revolutionized  the 
aaking  of  through  rates  to  the  Pacific 
oast.  All  of  that  great  development  I 
aw;  part  of  it  I  was.  Later,  thirty 
'ears  ago,  I  became  traffic  manager  of 
he  Chesapeake  &  Ohio  railroad,  now 
,0  ably  represented  by  our  friend,  Mr. 
^rank  Trumbull. 

In  the  recent  history  of  railroading 
Lnd  in  the  present  discussion  on  rail- 
way development,  the  great  army  of 
nvestors  in  railway  securities  have  not 
aken  a  prominent  part.  They  have 
aken  hardly  any  part,  but  on  the  basis 
»f  a  practical  railroad  experience  and 
)n  the  basis  of  a  practical  investment 
jxperience,  I  believe  it  is  in  approach- 
ng  present  problems  from  the  stand- 
joint  of  the  investor  that  we  are  most 
ikely  to  reach  a  proper  solution. 

Throughout  the  country  there  is  a 
rreat  army  of  investors  ready  to  sup- 
>ly  money  for  the  railroad  development 
vhich  the  country  so  badly  needs.  If 
;hese  investors  can  be  convinced  that 
;apital  invested  in  the  railroads  will  be 
jiven  proper  consideration  in  the  solv- 
ng  of  all  problems,  that  most  pressing 
problem,  the  raising  of  the  great 
imount  of  money  needed  for  new  con- 
struction and  development,  can  be  eas- 
ly  solved. 

Now  let  me  get  down  to  the  present 
status  of  this  matter. 

The  Present  Conflict 

There  is  at  present  a  conflict  raging 
between  two  elements  in  the  railroad 
transportation   business.  -; 

On  one  side,  are  the  directors  and  ex- 
ecutives of  the  railroads.  On  the  other 
side,  are  the  four  brotherhoods  of  en- 
gineers, firemen,  conductors  and  train- 
men. The  brotherhoods,  400,000  strong, 
united  and  alert,  say  with  one  voice, 
"We  must  have  more  pay  or  shorter 
hours  or  both  or  we'll  strike."  The 
executives  answer,  "With  our  restricted 
rates  and  higher  cost  of  operation,  we 
cannot  grant  your  request."  A  dead- 
lock occurs,  the  matter  is  appealed  to 
the  president  and  he,  to  avert  a  calam- 
ity, promises  to  grant,  through  con- 
gress, what  the  roads  deny. 

The  investors,  600,000  strong,  the  real 
owners  of  the  propei'ties,  scattered  all 
over  this  country,  having  an  immense 
power  vested  in  them,  unorganized,  are 
unable  to  come  forward  with  the  com- 
bined voice  of  even  a  paltry  dozen. 
They  are  uneasy.  They  chafe.  They 
hesitate.  They  ask  the  question,  "How 
about  future  investments  in  railroads 
torn  by  dissensions  between  execu- 
tives and  employes?" 


They  finally  evolve  this  thought: 
The  executives  of  the  road  represent 
us  and,  in  the  main,  do  it  satisfactor- 
ily; but,  owing  to  the  fact  that  there 
is  a  prejudice  against  them  in  congress, 
in  the  commissions,  and  in  the  mind  of 
the  public,  they  can't,  in  their  official 
capacity,  exert  as  much  influence  in 
certain  fields  as  we  could  if  we  should 
act  for  ourselves  independently.  Let 
us  get  together  and  let  us,  the  owners 
of  the  roads,  show  to  congress  and  the 
commissions  that  political  influence 
and  voting  power  are  not  wholly  con- 
fined to  shippers  and  the  four  brother- 
hoods. 

The  investors,  in  addition  to  thinking 
in  this  manner  as  to  the  attitude  exist- 
ing between  their  railroad  executives 
and  the  brotherhoods,  evolve  another 
thought,  as  follows: 

We  are  the  real  owners  of  the  rail- 
roads. It  is  our  money  which  is  in- 
vested, therefore,  you,  the  brotherhoods, 
are  our  employes.  Now  what  is  the 
matter?  We  are  600,000  strong;  you 
are  400,000  strong.  Tou  are  organized; 
we  are  not.  You  have  put  one  over  on 
us,  because  you  are  organized,  but  it  Is 
unfair.  It  won't  stand  the  test.  Let  us 
talk  over  our  grievances.  You  have 
yours.  We  have  ours.  We  can't  pay 
what  you  demand  unless  we  are  helped. 
Instead  of  snarling  and  quarreling  with 
your  executives,  let  us  together  find 
the  solution  of  the  matter  and,  when 
we  get  what  we  ought  to  have  (and  we 
ask  you  to  help  us  get  it),  you  may  be 
sure  that  we  in  turn  will  allow  you 
what  you  must  see  under  this  high 
cost  of  operation  we  cannot  grant. 

At  Cross   Purposes 

Now,  gentlemen,  you  must  see.  In 
the  present  condition  of  this  conflict 
between  the  railroads  and  their  em- 
ployes, that  they  are  working  at  cross 
purposes. 

The  great  army  of  railroad  brother- 
hoods have  been  forehanded.  Upon 
small  contributions  from  their  wages 
and  with  skilful  and  astute  leadership, 
they  have  built  up  a  power  and  force 
which  have  enabled  them  to  go  before 
the  highest  authority  in  the  land  and 
demand  and  obtain  a  promise  of  in- 
creased pay  upon  threat,  if  not  granted, 
of  closing  up  the  traffic  of  the  country. 

These  400,000  employes  of  600,000  in- 
vestment owners,  of  our  ?20, 000,000, 000 
national  transportation  system,  did 
this.  Kow  did  they  get  away  with  it? 
Was  it  because  their  numerical  strength 
made  them  politically  formidable?  Is 
this  big  free  country  to  be  coerced  by 
such  tactics? 

And  right  here,  is  it  not  logical  to 
ask  if  the  brotherhoods  can  by  this 
threat    obtain    higher   wages    why    can 


22 


THE  CENTRAL  STATES  CONFERENCE 


they  not  by  similar  threat  more  simply 
solve  this  problem  and  obtain  for  their 
employers,  the  railroad,  higher  rates  to 
enable  them  to  pay  higher  wages? 

"It  is  well  to  have  a  giant's  strength, 
but  it  is  tyrannous  to  use  it  as  a  giant." 

Now  I  submit  that  the  brotherhoods, 
in  taking  the  course  which  they  did, 
committed  a  great  mistake.  If  an  em- 
ploye of  mine  comes  into  my  office  with 
pistol  in  hand  and  says  to  me,  "Mr. 
Muir,  I  want  you  to  raise  my  pay.  If 
you  don't,  I  will  blow  your  head  off," 
I  tell  him  at  once  to  clear  out.  But  if 
he  comes  to  me  and  says,  "You  are 
making  money.  My  pay  is  not  enough 
under  this  increased  cost  of  living.  Will 
you  not  raise  it?"  I  immediately  rea- 
son with  him  and  devise  ways  and 
means  to  satisfy  him. 

This  course  of  the  brotherhoods  will 
not  stand  the  test.  The  railroads,  un- 
der present  conditions,  cannot  stand  for 
the  demand  of  the  brotherhoods  and 
continue  successful  operation.  If  the 
brotherhoods  had  used  the  same  influ- 
ence and  force  with  the  same  author- 
ity in  Washington  in  presenting  the 
needs  of  the  railroads  and  gained  for 
their  employers  what  they  think  they 
have  secured  for  themselves,  the  rail- 
roads would  today  be  able  to  meet  their 
demands. 

The  Real  Owners 

And  where  in  this  controversy  stand 
the  600,000  railway  investors,  who  em- 
body the  great  force  that  lies  latent  in 
the  owners  of  the  railroad  property? 
Nobody  ever  hears  a  peep  from  them, 
and  congress  and  the  commissions  sim- 
ply ignore  them  as  if  they  were  a  neg- 
ligible quantity.  That  is  not  the  way 
to  carry  on  an  effective  campaign. 
Why  shouldn't  they  appear  by  means 
of  their  own  chosen  representatives,  be- 
fore the  Newlands  commission  or  what- 
ever body  may  finally  be  appointed  to 
crystallize  conclusions  on  this  all  im- 
portant problem?  Why  shouldn't  they, 
as  an  organized  and  politically  formid- 
able body,  bring  their  influence  to  bear 
on  the  press  and  on  the  public?  Of 
course,  their  representatives  in  the  per- 
sons of  presidents,  legal  counsel,  etc., 
appear  and  speak  for  them,  but  we  all 
know  very  well  that  isn't  the  same 
thing,  because  the  public  prejudice  is 
against  the  managers  of  railroads,  not 
against  the  stockholders  who  own  them. 
It  is  of  supreme  importance  that  the 
owners  should  be  satisfied,  because  it  is 
they  who  furnish  the  funds  to  develop 
the  sections  of  country  not  now  proper- 
ly supplied  with  transportation  facili- 
ties. It  is  the  owners  that  congress 
and  the  commissions  ought  to  hear 
from,  and  the  owners  are  as  dumb  as 
oysters    and    as    powerless    as   jellyfish 


with  no  solidarity  or  means  of  expres- 
sion. 

And  now  the  Saturday  Evening  Post 
says,  "In  the  face  of  a  billion  net  last 
year,  railroad  managers  and  investors 
in  railroad  securities  are  wondering 
what  the  situation  will  be  after  the 
boom,  if  public  regulation  of  railroads 
is  applied  in  as  narrow  and  jealous  a 
spirit  as  it  was  for  some  years  before 
the  war.  Individual  shippers  may  ap- 
plaud when  a  particular  rate  they  are 
interested  in  is  ■  cut  down.  Farmers 
here  and  there  may  be  fooled  into  think- 
ing that  the  lowest  possible  freight  rate 
which  does  not  throw  the  carriers  into 
actual  bankruptcy  is  to  their  interest. 
But  it  is  very  certain  that,  for  the  coun- 
try at  large,  regulation  in  that  haggling, 
oppressive  spirit  d,oes  not  pay." 

I  quote  from  the  bible  when  I  say, 
"Beware  of  the  withholding  which  lead- 
eth  to  poverty." 

You  have  no  doubt  seen  that  the  pres- 
ent condition  of  the  railroads  has  been 
likened  to  a  man  suffering  from  hard- 
ening of  the  arteries.  This  is  a  striking 
simile,  but  I  cannot  fully  subscribe  to  it. 
Hardening  of  the  arteries  means  age, 
decay  and  approaching  dissolution. 
This  is  not  the  case  with  this  countrj'. 
We  are  young,  vigorous  and  have 
plenty  of  rich  virgin  sections  yet  to 
open  and  cultivate.  But  we  are  ham- 
pered and  hemmed  in  by  the  wants  of 
this  growing  nation.  We  need  blood  to 
pulsate  through  these  arteries.  The 
thousands  and  tens  of  thousands  oi 
small  investors  stand  ready  to  furnish 
the  means  to  inject  blood  in  the  shape 
of  rails,  ties,  rolling  stock,  terminal  fa- 
cilities, to  develop  these  new  fields. 
But  they  hesitate  and  fight  shy  of  new 
propositions  where,  by  the  lessons  of 
last  summer,  they  see  that  their  em- 
ployes' demands  are  satisfied  and  taken 
out  of  the  earnings  of  the  railroads  by 
the  government  and  their  own  rights 
for  proper  compensation  are  ignored. 

Purpose  of  the  League 

Now,  the  Railway  Investors'  league 
has  been  organized  to  consolidate,  for 
protective  action,  that  immense  power 
and  influence  possessed,  but  heretofore 
unused,  by  hundreds  of  thousands  of 
unorganized  investors. 

The  league  is  neither  anti-labor  nor 
political.  Its  aim  is  to  secure  fair  play 
alike  from  railroad  managers,  railroad 
workers,  railroad  regulatory  bodies  and 
political  parties.  It  will  oppose  unfair 
tactics,  whether  attempted  by  federal 
or  state  government  bodies,  by  railroad 
managements  or  railroad  employes.  It 
is  "anti"  nothing — save  unjust  prac- 
tices from  above  or  below,  from  with- 
out or  within. 

This  is  the  Railway  Investors'  league 


THE  CENTRAL  STATES  CONFERENCE 


23 


which  is  now  growing  like  a  young 
giant  and  to  which  we  want  every  man 
or  woman  who  owns  one  share  of  stock 
or  one  thousand,  one  hundred  dollar 
bonds  or  thousands,  to  belong  and  to 
support  this  immense  power  for  fair 
play — fair  play  for  owners  and  em- 
ployes, for  shippers,  for  the  public  and 
for  the  country. 

Mr.  Paul  Mack  Whelan,  the  secretary 
of  the  league,  is  here.  He  will  furnish 
the  platform  of  the  league,  and,  if  you 
are  in  sympathy  and  accord  with  its 
object  and  purpose,  enroll  yourself  now. 


More  especially  do  I  invite  co-operation 
and  enrollment  from  the  members  of 
the  brotherhoods.  There  is  not  one 
idea  or  sentiment  in  the  Railway  In- 
vestors' league  incompatible  with  the 
brotherhoods'  desire  to  obtain  fair  play 
from  their  corporations  and  for  their 
corporations.  Instead  of  being  400,000 
and  600,000,  let  us  make  it  a  million, 
combined  to  assert,  maintain  and  de- 
fend our  rights. 

Brothers  of  the  brotherhoods,  are  you 
with  us?  If  so,  come  forward  now  and 
act  jointly  with  us. 


After  the  applause  had  subsided  and  the  thanks  of  the  delegates  and 
visitors  had  been  voted  Mr.  Muir,  Chairman  Erskine  introduced  Lansing 
H.  Beach,  of  Cincinnati,  Ohio,  Colonel  U.  S.  A.  Corps  of  Engineers,  as  one 
of  the  most  competent  authorities  on  river  and  harbor  improvement.  Col. 
Beach  then  addressed  the  Conference  on  the  subject: 

"The  Improvement  of  the  Ohio  River." 


24  THE  CENTRAL  STATES  CONFERENCE 

The  Improvement  of  the  Ohio  River. 

By  Lansing  H,  Beach, 

Colonel  U.  S.  A.  Corps  of  Engineers. 

It  may  seem  a  little  superfluous  to  describe  the  Ohio  river  to  the 
people  of  Evansville  and  those  who  live  upon  its  banks,  but  as  many  peo- 
ple of  the  Conference  are  not  from  the  shores  of  the  Ohio,  a  few  state- 
ments covering  the  characteristics  of  that  stream  may  not  be  amiss. 

It  drains  a  territory  of  about  204,000  square  miles  in  extent,  derived 
from  fourteen  states,  either  wholly  or  in  part.  It  is  formed  by  the  junc- 
tion of  the  Allegheny  and  Monongahela  rivers  at  Pittsburgh.  It  has  a 
course  of  about  968  miles  to  its  mouth  at  Cairo.  In  the  upper  portion 
of  the  stream  the  slope  is  quite  steep,  about  seventeen  inches  to  the  mile. 
This  is  gradually  decreased  as  it  gets  down  the  river  to  about  eleven  inches 
a  mile. 

The  water  flow  in  the  Ohio  is  not  uniform.  They  have  a  surplus  fre- 
quently, decidedly  more  than  enough  in  the  early  spring  or  late  winter, 
and  in  the  fall  months  the  river  becomes  so  low  that  above  Cincinnati 
there  is  sometimes  a  navigable  depth  of  only  a  foot  and  a  half,  practically 
no  navigation  at  all,  and  from  Cincinnati  down  they  frequently  have  no 
more  than  two  and  a  half  feet.  It  was  to  remedy  this  condition  that  the 
improvement  of  the  Ohio  was  started.  Now,  the  improvement  of  the  Ohio 
wa's  like  Topsy.  It  wasn't  born,  it  simply  grew.  It  commenced  in  182  7 
and  from  that  time  until  the  late  seventies  efforts  to  secure  a  channel 
were  confined  to  dredging  or  to  construction  of  dikes  which  would  throw 
the  water  upon  the  most  obstructive  sandbars  and  wash  them  out.  This, 
however,  proved  unsatisfactory,  especially  for  the  movement  of  coal, 
which  formed  the  largest  commodity  transported  over  the  river.  Conse- 
quently in  1875  the  first  dam  was  constructed  at  Pittsburgh.  This,  how- 
ever, did  not  originate  in  the  desire  to  make  a  deep  channel  throughout 
the  river.  It  was  simply  formed  for  the  purpose  of  creating  a  harbor  at 
Pittsburgh  so  that  the  coal  fleets  could  be  made  up  at  that  locality  and  be 
able  to  start  down  the  river  on  the  front  of  the  rise  and  consequently  onto 
the  lower  river  and  the  Mississippi.  Formerly  the  coal  was  kept  in  the 
pools  of  the  Monongahela  river  and  had  to  be  brought  out  in  the  Ohio 
after  the  high  water  had  come.  Eleven  feet  was  about  the  depth  that 
was  needed  in  order  to  let  the  coal  boats  pass  down  safely.  It  was  fre- 
quently found  that  the  small  rise  would  be  lost.  The  water  would  run 
out  before  the  coal  fleets  could  be  made  up  and  started  down  river.  Con- 
sequently it  was  believed  advantageous  to  build  dam  No.  1,  as  it  was  then 
called,  the  Davis  Island  dam,  about  nine  miles  below  Pittsburgh,  so  that 
these  fleets  could  be  made  up  and  be  ready  to  start  on  the  rise.  This, 
however,  was  found  so  advantageous  that  it  was  considered  advisable  to 
build  some  lower  down  and  the  improvement  was  so  marked  and  the  ef- 
fects so  beneficial  that  Congress,  in  1910,  decided  that  it  would  be  a  good 
plan  to  build  locks  and  dams  throughout  the  river. 

Now,  these  dams  differ  from  those  ordinarily  constructed  in  most 
streams,  in  that  they  are  what  are  called  movable  dams.  That  is,  they 
can  be  raised  when  the  river  is  low,  but  put  down,  lying  on  the  bottom 
of  the  river  when  the  depth  is  sufficient  for  boats  to  pass  over  them  in 
the  ordinary  river  channel.  The  effect  of  a  lot  of  fixed  dams,  as  they  are 
called,  would  not  be  advantageous  on  the  Ohio  for  the  reason  that  the 
traffic  would  have  to  pass  through  the  locks  at  all  times.  As  the  number 
of  locks  from  Pittsburgh  to  Cairo  will  be  54  when  all  are  completed,  it 
can  easily  be  seen  that  this  would  ue  quite  a  handicap  on  through  navi- 
gation. The  result  of  a  fixed  dam  was  also  greatly  feared  on  the  upper 
Ohio   for  the   reason   that   it   was   believed   that   it  would   increase   flood 


THE  CENTRAL  STATES  CONFERENCE  25 

heights,  and  that  was  the  reason  why  consent  was  given  for  movable  dams 
as  well  as  the  advantage  to  navigation. 

Now,  the  pictures  which  will  be  shown  on  the  screen  will  describe 
better  than  I  could  tell  you  just  what  the  work  is. 


Moving  pictures  of  the  Ohio  river  and  dams  were  then  shown  on  the 
screen. 

Following  Col.  Beach's  address  and  the  moving  pictures,  a  vote  of 
thanks  was  oi-dered  and  a  motion  made  and  unanimously  passed,  "That 
it  shall  be  the  sense  of  this  meeting  that  the  legitimate  improvements  of 
the  Ohio  river,  as  outlined  and  illustrated  by  Col.  Beach,  shall  not  be  con- 
sidered in  any  sense,  what  has  so  often  been  termed,  a  'pork  measure.'  " 

Chairman  Murphy  resumed  the  chair  and  announced  the  appointment 
of  the  following  to  constitute  the  Resolutions  Committee: 

Hon.  Benjamin  Bosse,  Evansville,  Ind.,  Chairman;  David  Hirsh, 
Louisville,  Ky. ;  J.  R.  A.  Hobson,  Evansville,  Ind.;  George  H.  Evans,  In- 
dianapolis, Ind.;  Samuel  L.  Orr,  Evansville,  Ind.;  Marcus  A.  Sonntag, 
Evansville,  Ind.;  R.  L.  McKellar,  Louisville,  Ky. ;  E.  Vernon  Knight,  New 
Albany,  Ind.;  J.  L.  Bayard,  Vincennes,  Ind.;  Frank  Ellison,  Cincinnati, 
O.;  Phelps  Darby,  Evansville,  Ind. 

At  this  moment  the  Chairman  was  handed  a  telegram,  which  he  read 
to  the  audience: 

"Henry  C.   Murphy,   Chairman,   Central   States   Conference  on   Rail     and 

Water  Transportation,  Evansville,  Indiana. 

"May  I  not  send  my  greetings  to  the  Central  States  Transportation 
Conference  and  express  my  deep  interest  in  the  great  questions  it  has  as- 
sembled to  discuss.  I  wish  that  I  might  have  the  benefit  of  hearing  those 
discussions.  WOODROW  WILSON." 

The  Chairman  then  read  a  telegram  from  John  E.  Lathrop,  of  New 
York,  who  wired  from  Omaha  his  regret  at  being  unable  to  reach  Evans- 
ville to  personally  address  the  Conference.  Mr.  Murphy  thereupon  intro- 
duced Mr.  J.  C.  Johnson,  requesting  that  he  read  Mr.  Lathrop's  speech. 
Mr.  Johnson  then  read  the  following  from  Mr.  Lathrop  on  the  subject: 

"Car  Shortage  and  the  Cost  of  Living." 


26  THE  CENTRAL  STATES  CONFERENCE 

Car  Shortage  and  the   Cost  of  Living. 

By  John  E.  Lathrop, 

Director,  City  Planning  Department,  American  City  Bureau  of  New  York; 
And  Secretiiry,  Indiana  City  Planning  Committee. 

The  high  cost  of  living  takes  its  rise  from  two  cognate  causes: 

That  which  is  purely  economic  and  which  Is  more  or  less  from  human 
faults  and  imperfections. 

That  which  arises  from  defects  in  physical  processes. 

Our  entire  fabric  of  business,  industrial  and  financial  activities  is 
divisible  into  two  functions: 

Production. 

Distribution. 

I  refer,  of  course,  to  the  physical  process  of  distribution,  rather  than 
the  economic  distribution  of  wealth. 

Important  economies  have  been  introduced  in  the  function  of  pro- 
duction. The  principle  has  been  recognized  generally.  All  who  engage  in 
the  performance  of  the  productive  function  will  be  forced  at  once  to  reach 
the  new  standard,  if  they  have  not  already  done  so.  I  have  confidence  in 
American  brains,  energy  and  patriotism  to  believe  that,  in  respect  of  our 
productive  processes,  we  shall  attain  a  level  of  economy  as  high  as  that 
which  has  been  achieved  by  any  nation  under  the  sun. 

However,  in  the  physical  distribution  of  products,  we  Americans  have 
woefully  fallen  down.  Our  distributive  system  is  wasteful  in  the  extreme. 
It  is  so  wasteful  that,  in  my  opinion,  the  question  of  railroad  rates  is  not 
so  important  as  another,  service,  which  I  purpose  to  raise  herein. 

I  am  not  unmindful  of  the  necessities  which  have  been  laid  upon  this 
republic  to  'regulate  rates,  but  at  the  same  time  I  remember  that  the  In- 
terstate Commerce  Law  invests  the  Interstate  Commerce  Commission  with 
authority  to  regulate  "rates  and  practices,"  and  I  believe  that,  before  our 
transportation  problems  are  solved,  we  shall  have  to  give  vastly  more  at- 
tention to  "practices";  and  that,  as  a  people,  we  must  take  official  cogni- 
zance of  still  another  thing,  equipment  and  plant,  to  a  greater  extent  than 
we  have  in  the  past. 

Delays  in  the  shipment  of  goods  and  products  are  today  the  night- 
mare of  this  nation.  This  nocturnal  steed  troubles  the  slumbers  of  every 
business  man,  punctuates  his  every-day  conversation,  in  every  locality. 

We  refer  to  this  difficulty  as  "car  shortage."  My  thesis  is  to  show 
that  it  is  not  actually  car  shortage,  but  the  non-use  of  that  which  would 
be  an  abundant  supply  of  equipment,  if  we  had  adequate  systems  of  rail 
terminals  and  water  routes  and  terminals. 

This  so-called  car  shortage  is  not  new,  although  aggravated  beyond 
most  previous  experiences  of  a  similar  nature.  During  fifteen  years,  in 
which  I  have  closely  followed  the  proceedings  before  the  Interstate  Com- 
merce Commission,  I  have  noted  these  gluts  of  freight  with  recurring  regu- 
larity. Every  time  an  extra  burden  is  laid  on  our  transportation  system, 
the  machine  breaks  down. 

Speaking  in  the  language  of  the  engineer,  our  transportation  system 
in  this  country  is  carrying  the  peak  load  practically  all  the  time. 

It  has  become  the  rule  among  business  men  to  expect  the  aforesaid 
delays  in  the  shipment  of  goods  and  products.  All  contracts  are  figured 
at  a  higher  price  level  to  take  care  of  the  cost  and  wa.»ite  of  such  delays. 
So  that  the  tendency  is  to  estimate  all  processes,  commercial  and  indus- 
trial, on  that  higher  price  level.  It  has  been  interwoven  as  an  essential 
factor  into  the  business  activities  of  the  country. 


THE  CENTRAL  STATES  CONFERENCE  27 

Herein  do  we  find  a  major,  if  not  the  major,  cause  of  the  high  cost  of 
living;  and  this  enormous  waste  caused  by  these  delays  is  on  account  of 
the  inadequacy  of  our  terminal  systems. 

In  the  United  States  we  have  approximately  three  million  freight 
cars  of  all  classes.  The  average  movement  per  car  per  twenty-four  hour 
day  on  the  Pennsylvania  Railway  for  the  last  year  was  23.6  miles,  or 
slightly  less  than  one  mile  an  hour.  (I  am  so  informed  in  a  letter  to  me 
from  Mr.  Shafer,  Superintendent  of  Transportation  on  the  Pennsylvania 
lines.)  The  average  for  the  whole  country  of  movement  per  car  per 
twenty-four  hour  day  is  about  seventeen  miles. 

Now,  freight  trains  move  up  to  seventeen  miles  an  hour.  An  aver- 
age freight  train  movement  of  twelve  miles  an  hour  would  give  us  288 
miles  per  24-hour  day.  Of  course,  no  one  expects  such  an  average  move- 
ment per  car  per  24-hour  day  as  288  miles. 

But,  if  the  average  movement  per  car  on  all  roads  is  only  seventeen 
twenty-fourths  of  a  mile  an  hour,  and  under  a  mile  an  hour  on  one  of  the 
most  efficiently  managed  railway  system  of  the  country,  obviously  there 
is  a  serious  discrepancy  somewhere. 

I  find  it  in  the  terminal  system — in  the  deplorable  inadequacy  of  ter- 
minal facilities  to  permit  the  movement  of  freight  at  a  higher  average  rate 
of  distance  per  day. 

Recently  I  made  a  shipment  from  Fort  Wayne  to  Evansville.  It 
moved,  from  the  time  I  offered  it  in  Fort  Wayne  to  the  time  it  was  de- 
livered to  me  in  Evansville,  an  average  of  one  and  one-half  miles  an  hour. 
This  was  true,  notwithstanding  every  official  of  the  Pennsylvania  Railroad 
and  the  Chicago  &  Eastern  Illinois  Railroad  most  courteously  pounded 
that  shipment  on  the  back  and  by  telegraphing  and  telephoning  made  of 
it  relatively  a  race  horse. 

Transportation  for  me  began  when  I  offered  the  shipment  at  the  rail- 
way platform;  it  ended  when  the  stuff  was  offered  me  again  in  Evansville 
for  loading  on  a  truck,  and  it  has  been  hauled  through  the  streets  to  the 
building  which  was  my  terminus.  What  was  the  trouble?  The  freight 
trains  on  the  Pennsylvania  and  the  Chicago  &  Eastern  Illinois  moved,  as  I 
say,  up  to  seventeen  miles  an  hour;  yet  the  average  movement  for  me  on 
the  total  transaction  was  one  and  one-half  miles  an  hour. 

I  traced  the  history  of  that  shipment.  It  was  four  days  getting  out 
of  the  Fort  Wayne  terminal  on  account  of  a  glut.  It  had  to  pass  through 
Columbia  City  and  Terre  Haute  and  into  the  terminal  at  Evansville,  at 
which  point  it  arrived  a  day  before  it  was  available  for  unloading. 

I  am  not  complaining,  but  on  the  other  hand  am  acknowledging  the 
courtesies  of  the  railway  men  who  exerted  themselves  to  extricate  me  from 
my  difficulty. 

But  there  should  have  been  no  difficulty.  Furthermore,  my  difficulty 
arose  not  from  car  shortage,  but  from  terminal  facility  shortage;  and  that 
is  the  crux  of  this  whole  situation. 

Shortly  ago,  the  owner  of  a  mine  in  a  town  a  few  miles  west  of  Evans- 
ville had  a  shipment  of  machinery  coming  from  Pittsburgh.  He  needed  it 
desperately.  He  sent  a  man  to  Pittsburgh  personally  to  accompany  and 
actually  ride  in  the  freight  car.  This  he  did,  inducing  the  train  and  yard 
crews  to  hurry  up  that  shipment — probably  using  up  one  or  two  boxes 
of  cigars  (I  hope  for  the  sake  of  the  railway  men,  they  were  good  ones), 
and  he  arrived  in  Evansville,  believing  his  troubles  were  at  an  end.  He 
boarded  a  passenger  train  and  went  to  his  home  town. 

Four  days  later,  instead  of  one  day  later,  the  car  reached  his  mine, 
in  the  meantime,  it  had  been  flooded.  It  cost  him  fifteen  thousand  dol- 
lars of  actual  damage,  plus  the  loss  of  production,  pending  repairs  and 
pumping  out. 

Last  June,  I  rode  from  Altoona  to  Harrisburg,  Pennsylvania,  on  the 
rear  end  of  one  of  the  express  trains.     There  was  a  solid  line  of  loaded 


28  THE  CENTRAL  STATES  CONFERENCE 

cars  to  move  East,  which  were  not  moving.  These  cars  extended  from 
station  to  station,  practically  all  the  way. 

What  was  the  matter?  Car  shortage?  Certainly  not.  These  cars 
could  not  be  gotten  through  the  terminal  at  Harrisburg.  You  talk  of 
car  shortage?  Assume  that  the  F'iennsylvania  Railroad  had  placed  a  mil- 
lion additional  cars  on  the  tracks  this  side  of  Altoona.  Would  that  have 
helped  to  get  these  glutted  cars  through  the  Harrisburg  terminal?  Of 
course,  it  would  not.     It  was  terminal  facility  shortage. 

It  is  terminal  facility  improvements  that  is  needed  to  stop  this  low 
potency  use  of  railway  equipment.  Here  are  two  or  three  million  freight 
cars  moving  less  than  a  mile  an  hour,  on  the  average,  on  one  of  the  best 
managed  railroads  of  the  United  States. 

Were  there  adequate  terminal  facilities,  could  we  not,  by  increasing 
the  movement  per  car  per  hour  for  the  whole  mass  of  equipment,  make 
say,  three  million  cars  do  the  work  of  vastly  more  cars? 

Suppose  we  attained  an  average  movement  per  car  per  24-hour  day 
of  forty-eight  miles,  or  two  miles  an  hour.  Would  not  that  more  than 
double  the  movement  of  freight;  or  be  tantamount  to  putting  five  to  six 
million  car  movements  into  operation  instead  of  two  or  three  million? 

I  am  conscious  of  the  fact  that  there  are  other  elements  entering  into 
the  situation.  The  prevalency  of  demurrage  rates  on  detained  cars  in 
freight  yards  is  proof  evident  that  one  factor  is  the  sometimes  tardy  un- 
loading or  loading  of  cars  offered  by  the  railway  company,  but  I  am  sure 
that  this  factor  compared  with  terminal  facility  shortage  is  negligible. 

However,  in  passing,  let  me  say  that  I  believe  that  demurrage  rules 
should  not  be  less  severe,  but  that  they  should  be  rather  stiff  to  take  care 
of  that  element  of  sometimes  negligence;  or  at  least  to  spur  to  highest 
endeavor  to  unload  freighted  cars  or  load  empties  when  offered  in  response 
to  demand  therefor. 

I  am  informed  that  lately  ten  thousand  cars  of  wheat  stood  on  the 
Chicago  tracks,  not  unloaded,  because  there  were  not  facilities  to  handle 
them;  practically  nine  million  bushels  of  wheat  which  were  in  cars  Avhich 
were  being  used  as  warehouses,  when  there  should  be  facilities  to  handle 
them  and  the  cars  be  offered  again  for  traffic.  All  the  time  after  a  brief 
period,  these  cars  were  paying  a  demurrage  rate  of  five  dollars  a  day 
and  the  cost  was  being  marked  up  against  the  sacks  of  flour  that  were  be- 
ing sold. 

I  wish  to  revert  momentarily  to  answer  a  possible  objection  that  con- 
ditions are  now  unusual;  they  are  unusual  only  that  the  trouble  is  slightly 
aggravated.  In  principle,  this  condition  has  been  present  in  marked  de- 
gree, as  we  all  know,  with  frequency  for  many  years  past. 

During  a  total  travel  of  three  hundred  thousand  miles  during  the  last 
twenty  years,  most  of  it  in  this  country,  I  have  noted  these  conditions  in 
all  parts  of  the  United  States.  Have  I  any  technical  authority  for  the  bur- 
den of  my  thesis? 

James  J.  Hill  six  years  ago  said,  "The  United  States  should  invest 
annually  a  billion  dollars  in  terminals.  Were  this  to  be  done  for  ten 
years,  at  the  end  of  that  period  we  should  find  that  repressed  and  new 
traffic  would  have  absorbed  the  added  facilities  and  we  should  again  have 
serious  congestion." 

But  Mr.  Hill  said  another  and  most  striking  thing:  "I  can  haul  a  ton 
of  freight  three  hundred  miles  cheaper  than  I  can  pass  it  tiirough  the 
average  city  terminal." 

Let  us  take  the  whole  fabric  of  transportation  between  Chicago  and 
New  York,  approximately  nine  hundred  miles,  or  three  units  of  three 
hundred  miles  haulage  each.  There  are  about  eight  major  terminals  be- 
tween these  two  metropolises,  or  ten  in  all,  with  the  originating  and  des- 
tination terminals.  Make  an  equation  on  the  basis  of  Mr.  Hill's  phil- 
osophy: 


I 


THE  CENTRAL  STATES  CONFERENCE  29 

Thirteen,  or  the  Chicago-New  Yorlc  fabric  of  transportation,  equals 
three  units  of  actual  haulage,  plus  ten  units  of  terminal  operations. 

I  submit  that  this  equation  indicates  essentially  the  largest  problem 
that  relates  to  car  shortage  and  the  high  cost  of  living. 

In  Washington,  D.  C,  I  personally  organized  an  investigation  into 
the  cost  at  the  kitchen  door  of  thirty  food  products  from  the  Potomac 
Valley,  compared  with  the  prices  paid  the  farmers  and  fruit  men  at  the 
wharf.  These  articles  in  no  case  advanced  less  than  three  hundred  per 
cent,  in  many  cases  advanced  a  thousand  per  cent,  and  in  some  as  high 
as  eighteen  hundred  per  cent. 

I  realize  that  there  were  many  factors  in  this  enormous  advance  from 
the  point  of  ultimate  production  to  the  point  of  ultimate  distribution; 
that  the  prices  in  one  city  affect  the  prices  in  another,  and  that  all  tend 
to  take  the  highest  price  level  of  the  largest  city;  but  I  cite  the  Wash- 
ington case  chiefly  to  call  attention  to  the  crudities  of  the  facilities  in 
Washington,  which  are  typical  of  the  American  standard  of  co-ordinating 
of  land  and  water  facilities.  Washington  prices  were  largely  a  reflection 
of  the  very  high  prices  of  New  York,  and  the  crude  water  and  land  termi- 
nal facilities  at  Washington  unfortunately  are  a  reflection  of  the  crude 
facilities  of  like  nature  across  the  continent. 

That  brings  me  at  least  to  a  mention  of  something  which  cannot  be 
ignored  in  this  thesis.  We  are  in  the  third  phase  of  the  development 
of  our  transportation  processes.  In  the  first  we  had  rivers  and  canals; 
in  the  second  railroad  development  with  a  confessed  hostility  to  water 
carrying  by  the  railroad  men,  and  indifference,  unfortunately,  by  the  peo- 
ple as  a  whole.  This  third  phase,  which  we  are  now  entering,  must  be  the 
co-ordination  of  rail  and  water  facilities. 

The  cool  truth  is  that  Ave  have  not  been  able  and  shall  not  be  able  to 
move  our  tonnage  on  rail  to  the  practically  total  exclusion  of  inland  water- 
ways. We  shall  have  to  develop  our  inland  waterway  system,  as  much  for 
the  relief  of  the  railways  as  for  the  economic  benefit  to  the  nation. 

I  have  always  held  to  that  school  of  transportation  economists  which 
believed  that  the  railways  were  short-sighted  in  opposing  the  develop- 
ment of  inland  water  routes.  I  insist  that,  with  the  slower  moving  and 
low  price  freight  handled  as  much  as  possible  on  the  waterways,  the  rail- 
roads, thus  relieved  for  many  of  the  low  price  hauls,  could  utilize  their 
investment  to  carry  the  higher  priced  freight  to  their  financial  better- 
ment. 

However,  the  railroads  now  favor  the  development  of  inland  water 
routes. 

I  believe  we  shall  have  to  adopt  the  system  employed  in  Germany, 
where  about  thirty  per  cent,  of  their  tonnage  moves  on  canals  or  canalized 
rivers;  but  wherever  water  facilities  are  developed,  there  is  always  present 
the  most  perfect  engineering  device  for  the  trans-shipment  from  water 
to  rail  or  rail  to  water.     We  must  use  this  as  our  model. 

Along  the  great  Ohio  valley,  must  move  a  vast  water  tonnage,  and 
at  Evansville,  St.  Louis,  Louisville,  and  Cincinnati  must  be  developed  the 
absolutely  best  engineering  devices  for  trans-shipment.  All  this  will 
call  for  enormous  additional  investments.  The  way  has  been  paved  for 
part  of  this  added  investment  by  the  introduction  of  economies  in  the 
operation  of  railroads.  When  a  few  years  ago  Louis  D.  Brandies  of  Bos- 
ton, now  a  justice  of  the  United  States  Supreme  Court,  asserted  that  the 
railroads  were  wasting  a  million  dollars  a  day,  which  could  be  saved  by 
economies  without  increasing  rates,  the  railroad  interests  scoffed. 

The  other  day  a  representative  of  the  railway  executives'  organiza- 
tion specifically  admitted  that  Mr.  Brandies  had  been  quite  accurate  in 
his  estimate,  and  that  since  the  Brandies  allegation  was  made,  the  rail- 
roads had  effected  operating  economies  of  about  a  million  dollars  a  day. 

I  do  not  pretend  to  estimate  even  vaguely  what  this  added  invest- 


30  THE  CENTRAL  STATES  CONFERENCE 

ment  must  be,  but  it  is  safe  to  predict  from  the  statements  of  James  J. 
Hill  and  other  great  transportation  scientists  that  it  will  run  into  the  bil- 
lions. 

Where  shall  we  get  these  additional  billions?  "^'hy  should  we  not 
all  frankly  face  the  facts?  I  apprehend  that  not  a  dozen  men  within  the 
sound  of  my  voice  question  in  their  inmost  hearts  that  the  ultimate  solu- 
tion is  going  to  be  government  ownership.  I  honestly  believe  that  even 
those  who  oppose  government  ownership  as  a  policy  in  most  cases  admit 
that  it  is  coming. 

If  this  be  true,  why  should  we  not  as  a  people  have  the  moral  cour- 
age to  face  the  facts?  Of  course,  it  is  a  colossal  problem,  and  the  easy 
way  is  to  push  it  from  us  into  the  far  future;  but  is  it  not  the  part  of 
wisdom  frankly  to  address  ourselves  to  the  facts,  rather  than  to  adopt 
the  weak  policy  of  pretending  something  which  we  know  is  not  true? 

The  intensive  development  of  our  internal  processes  is  in  its  infancy. 
Potential  agricultural  productivity  is  certainly  not  more  than  fifty  per  cent 
developed.  Imagine  the  processes  of  the  older  European  countries  ap- 
plied to  our  husbandry,  and  an  annual  form  and  livestock  production  of 
eleven  billions  increased  to  twenty-two  billions;  our  coal,  gas  and  oil  mo- 
tive power  supplemented  by  the  utilization  of  our  vast,  but  practically  un- 
used, water  powers;  our  population  increased  as  it  is  increasing,  «nd  try 
to  picture  the  colossal  task  of  moving  all  the  freight  on  rail. 

Gentlemen,  it  would  be  to  attempt  the  impossible.  Money  could  not 
be  poured  from  a  horn  of  plenty  into  which  had  been  dumped  the  wealth 
of  a  thousand  Golconda  mines  fast  enough  to  meet  the  immediately  press- 
ing demands  for  transportation  facilities  and  give  even  a  little  attention 
to  future  needs,  without  the  most  extensive  use  of  all  possible  inland 
water  routes. 

A  lot  of  buncombe  has  been  talked  about  the  pork  barrel.  I  have 
seen  a  good  many  rivers  and  harbors  appropriation  bills  in  the  process 
of  the  making,  and  I  freely  admit  that  a  lot  of  Mud  Creeks  have  been 
recognized  which  are  not  more  than  deep  enough  to  provide  Johnnie 
with  a  swimming  hole:  but,  on  the  other  hand,  -no  one,  with  a  glimmer 
of  reason  or  the  slightest  conception  of  the  transportation  situation  of 
this  country,  will  question  that  we  must  hurry  to  develop  our  inland 
water  routes  and  co-ordinate  them  with  our  rail  systems.  The  great  units 
in  the  water  system  will  be  the  Ohio  River,  the  Mississippi  River,  the 
Missouri  River,  the  Great  Lakes  with  its  co-ordinate  New  York  Barge 
Canal,  the  Inter-coastal  water  route  along  the  Atlantic  water  front,  and 
the  Columbia  River  Basin. 

As  we  work  out  this  vast  system,  we  must  study  the  co-ordination  of 
rail  and  water  facilities,  and  we  must  end  the  era  in  which,  in  the  dis- 
cussion of  rates  and  transportation  practices,  the  rail  transportation  sj-s- 
tem  appears  before  the  courts  as  an  opponent  of,  or  enemy  of,  the  water 
system.  The  two  must  be  regarded  as  essential  parts  of  the  whole. 

These,  gentlemen,  are,  in  my  opinion,  the  most  deeply  fundamental 
questions  with  relation  to  car  shortage  and  the  cost  of  living.  Humanity 
Is  prone  to  superficial  processes.  We  are  at  this  time  more  or  less  super- 
ficial in  our  discussion  of  the  best  means  to  combat  the  high  cost  of  liv- 
ing. We  see  some  surface  symptom  and  treat  it,  rather  than  to  go  co  the 
fundamental  cause  of  the  disease.  These  superficial  treatments  are  not 
without  their  values,  because  we  cannot  always  wait  to  work  out  our 
fundamental  ultimates,  but  we  shall  have  to  go  deeper  and  attack  the 
real  issue. 

And  in  doing  so,  we  must  rise  to  a  level  of  real  patriotism.  Every 
class,  the  railroad  man,  the  shipper,  the  consumer,  the  laboring  man,  the 
official  must  step  up  to  that  higher  altitude  of  consideration  for  the  good 
of  the  whole  mass  which  we  have  not  yet  attained  to  the  necessary  de- 
gree. When  this  spirit  shall  have  taken  possession  of  us  and  we  rise  su- 


THE  CENTRAL  STATES  CONFERENCE  31 

perior  to  the  pettier,  littler  selfish  motives  which  lead  us  into  foolish  class 
antagonisms,  we  shall  perhaps — will  you  pardon  me  for  just  a  touch  of 
sentiment? — we  shall  perhaps  discover  the  practical  beauty  in  these  lines 
of  the  poet,  Sam  Foss: 

Let  me  live  in  my  house  by  the  side  of  the  road, 

Where  the  race  of  men  go  by. 

They  are  good,  they  are  bad. 

They   are    weak,    they   are    strong. 

Wise,  foolish;  so  am  I. 

So  why  should  I  sit  in  the  scorner's  seat. 

Or  hurl  the  cynic's  ban? 

Let  me  live  in  my  house  by  the  side  of  the  road. 

And  be   a  friend  of  man. 


THURSDAY  EVTENING  SESSION. 

December  14th,  1916. 


Chairman  Murphy  called  the  meeting  to  order  at  8:30  o'clock  p.  m. 

Ladies  and  gentlemen  :  We  will  resume  our  deliberations  accord- 
ing to  our  program.  Up  to  this  hour  we  have  had  transportation  dis- 
cussed from  the  angle  of  the  railways,  the  first  address  being  the  monu- 
mental effort  of  Mr.  Alfred  P.  Thom.  The  next  phase  was  the  discussion 
of  the  subject  from  the  angle  of  the  investors,  as  represented  by  Mr.  John 
Muir,  who  made  an  equally  remarkable  presentation  of  the  case  of  the 
man  who  puts  up  the  capital.  Third,  we  had  the  neutral  viewpoint  pre- 
sented by  Mr.  John  E.  Lathrop.  Tonight  we  are  going  to  have  the  oppor- 
tunity of  hearing  from  a  man  who  presents  the  side  of  the  fellow  that 
pays  the  bills,  the  shipper's  side.  We  are  fortunate,  indeed,  in  having 
with  us  so  able  a  representative  of  the  great  shippers'  interests.  When 
I  was  seeking  a  man  to  fill  this  place  I  wired  Colonel  George  Pope,  of  the 
National  Manufacturers  Association,  and  asked  him  if  he  couldn't  come 
to  talk  for  the  shippers  and  the  big  manufacturers.  He  replied  that  en- 
gagements in  New  York  prohibited  his  attendance.  Thereupon  I  wired 
for  suggestions  and  immediately  the  reply  came  back,  "Get  E.  B.  L^gh 
and  J.  M.  Belleville."  Through  fortuitous  circumstances  we  have  tffeen 
able  to  secure  both  of  these  men.  We  are  indeed  lucky  in  having  these 
men  here,  because  the  shippers  of  this  country  have  no  abler  representa- 
tives than  they.  We  have  alloted  them  plenty  of  time  for  the  discussion 
of  the  subject. 

Mr.  E.  B.  Leigh,  of  Chicago,  a  director  in  the  National  Association 
of  Manufacturers,  and  Vice-President  of  the  Railways  Business  Associa- 
tion, will  talk  to  us  on  the  subject,  "The  Shippers,  Their  True  Relation  to 
the  Transportation  Problem."  There  is  no  man  in  the  country  who  can 
better  define  the  interests  of  the  shippers  than  Mr.  Leigh. 

I  have  the  pleasure  of  introducing  Mr.  Leigh  to  this  audience.  (Ap- 
plause.) 


32 


THE  CENTRAL  STATES  CONFERENCE 


The  Shippers,  Their  True  Relation  to  the  Trans- 
portation Problem. 

By  Mr.  E.  B.  Leigh. 


Having  been  invited  to  speak  from 
the  standpoint  of  "The  Shippers."  it 
may  not  be  out  of  place  to  say  that, 
owing  to  the  inability  of  Col.  George 
Pope,  president  of  the  National  Associ- 
ation of  Manufacturers,  to  be  present, 
our  esteemed  chairman.  Col.  Murphy, 
generously  accepted  Col.  Pope's  sug- 
gestion of  my  name  as  a  substitute  for 
his  own,  and  as  a  director  of  that  as- 
sociation. 

In  like  manner,  and  because  of  the 
necessary  absence  of  Mr.  George  A. 
Post,  president  of  the  Railway  Bus- 
iness association,  I  am  responding  to 
the  call  of  that  association  as  one  of 
its  vice-presidents — thus  appearing  in 
somewhat   dual   capacity. 

The  direct  business  with  which  I 
am  identified  is  such  that  it  is  allied 
with  both  of  these  associations.  As 
criticism,  or  question  may  arise  as  to 
the  unbiased  view^  point  of  a  company 
selling  its  products  to  railways,  I  trust 
you  will  permit  me  to  say  that  70  per 
cent  of  my  company's  business  is  en- 
tirely removed  from  railway  contact — 
but  30  per  cent  having  such  contact. 

These  conditions  being  explained  to 
Col.  Murphy,  he  requested  that  the 
cause  of  the  shipper  be  presented  on 
broad  lines. 

In^this  effort,  there  may  be  some  ad- 
vantage in  having  two  angles,  or  view 
points,  each  of  which  may  be  tested 
by  its  effect  upon  the  other — the  two- 
fold relation  thus  perhaps  serving  to 
induce  a  broader  and  fairer  consider- 
ation  of  the   question  involved. 

What  is  the  interest  of  the  shipper 
in  the  railway   problem? 

This  question,  when  asked,  may 
elicit  many  answers,  the  most  com- 
mon of  which  would  doubtless  be:  "low 
freight  rates."  This  is  the  most  pop- 
ular conception  of  the  primary  inter- 
est of  the  shipper  in  the  railways  of 
the  country;  yet  upon  analysis  it  i? 
found  that  every  industry,  every  com- 
mercial enterprise,  and  every  individ- 
ual is  interested  not  only  in  the  rail- 
ways as  such,  but  in  their  effective 
and    profitable    operation    as   well. 

This  universal  dependence  varies, 
however,  in  directness,  in  form,  and  in 
the    consciousness    of    the    individual. 

The  products  of  the  farm  would  be 
of  relatively  small  value,  minus  the 
facilities  of  transportation  to  markets 


of  sale  and  consumption.  The  pro- 
duction of  the  infinite  variety  of  com- 
modities, essential  to  the  maintenance 
of  our  present  day  civilization,  is 
made  possible  by  the  railways.  The 
daily  necessities  and  luxuries  of  life 
come  to  us,  as  individuals,  so  almost 
automatically  as  to  warrant  the  ex- 
pression, "as  free  as  the  air  we 
breathe";  yet  we  have  to  look  back  but 
a  little  to  see  that  the  railway  is  the 
handmaiden  of  us  all. 

So  when  we  speak  of  the  "shipper," 
we  naturally  ask  who  is  the  shipper: 
what  is  he;  and  why?  The  answer 
seems  obvious;  he  is  every  one  of  us — 
that  is,  in  the  sense  that  every  one  of 
us  is  an  interested  party,  when  the 
railways  of  the  country  are  under 
consideration. 

But  referring  to  the  shipper,  as  he 
is  commonly  conceived  in  our  business 
life: 

How  often  have  we  heard  our  great 
manufacturers  speak  of  the  two  fund- 
amental divisions  of  industry  as  con- 
sisting of  making  and  selling  goods: 
and  of  further  likening  them  to  th' 
two  sound  legs  upon  which  every 
healthy  man  must  stand.  The  anal- 
ogy is  apt,  so  far  as  it  goes,  that  is, 
if  the  man  has  merely  to  stand.  Just 
so  with  the  great  furnace,  the  great 
mill,  or  warehouses — if  their  functions 
are  complete  with  the  goods  piled  be- 
fore their  doors.  But  the  strong  man's 
limbs  will  surely  atrophy  if  he  has 
no  road  to  travel;  just  as  all  manu- 
facture will  stagnate  without  the 
means  of  highly  diversified  distribu- 
tion of  its  products. 

Thus  there  is  a  third  fundamental 
element  in  all  industry  and  commerce, 
appearing  at  the  threshold  of  any 
producing  enterprise,  and  again  when 
the  product  has  been  sold,  and  is  ready 
for  distribution — transportation;  a 
third  partner — not  within  our  corpor- 
ate organization,  but  one  vitally  es- 
sential to  it.     How  shall  we  treat  him? 

We  are  extremely  careful  in  the  sel- 
ection of  our  corporate  officials.  We 
seek  men  of  the  highest  order  of  abil- 
ity to  evolve  and  conduct  our  manu- 
facturing processes;  we  seek  men  of 
judgment,  foresight,  discretion  and 
tact  to  outline  and  execute  our  com- 
mercial   policies — to    sell    our   product. 


THE  CENTRAL  STATES  CONFERENCE 


33 


^nd  as  we  logically  regard  both  as 
imong  our  most  valuable  assets,  we 
:onserve  their  health  and  strength,  and 
stimulate  their  activity  by  liberal 
compensation. 

We  do  these  things,  not  from  philan- 
thropic motives;  but  from  the  sound- 
est of  all  business  reasons — because 
t  pays.. 

Now,  if  all  industry  and  commerce 
rest  upon  this  triangular  base  of  mak- 
ng,  selling  and  distributing;  why 
should  we  jealously  guard  the  sustain- 
ng  power  of  the  two  legs  of  the  tri- 
pod, and  imperil  the  equilibrium  of  the 
mtire  structure  by  a  gross  indiffer- 
ince  to  the  third. 

Perhaps  it  may  be  said  of  this  ex- 
;ernal  partner  that  he  is  not  one  of 
is;    that   he   is   a   third   party: 

Could  anything  be  more  fallacious? 
I^an  we  say  he  is  not  of  us,  when 
vithout  him  we  would  have  to  retire 
rom  business?  Can  we  look  upon  him 
iskance — as  a  third  party,  when  we 
-ealize  that  he  has  made  possible  oui 
ndustrial    and    commercial    existence? 

Maculay  has  said:  "Of  all  inventions, 
;he  alphabet  and  the  printing  press 
ilone  excepted,  those  inventions  which 
ibridge  distances  have  done  most  for 
:he   civilization   of  our  species." 

While  a  no  less  famous  writer  than 
Liord  Bacon  aptly  said:  There  are 
hree  things  which  make  a  nation 
rreat  and  prosperous;  a  fertile  soil,  a 
)usy  workshop  and  easy  conveyance 
or  man  and  goods  from  place  to 
)lace." 

I  assume  that  every  business  man 
>elieves  in  the  economic  theory  that 
ill  industry  and  commerce,  to  sur- 
/ive,  must  be  conducted  at  a  reason - 
ible  profit.  I  also  assume  that,  in- 
lividually,  every  one  of  us  is  weak 
mough,  or  human  enough,  to  buy  any 
;ommodity  we  may  need  at  as  low  a 
jrice  as  we  can  impose  upon  the  seller 
md— I  blush  to  add — regardless  of 
vhether  that  price  is  above  or  below 
;ost  of  production — that  is  not  our 
joncern,  as  we  conceive  it 

In  an  economic  sense,  the  railways 
ire  selling,  and  the  shippers  are  buy- 
ng  a  commodity — transportation.  And 
■ight  here  arises  the  anomaly  of  the 
;rans^ction.  As  individuals,  when  you 
sell  and  I  buy,  we  are  each  of  us 
vholly  untrammeled  by  any  dictation 
is  to  price  other  than  your  knowledge 
)n  your  part  of  your  cost  of  produc- 
;ion  and  for  my  own  part,  my  knowl- 
edge as  to  the  figrure  at  which  I  can 
secure  the  commodity  elsewhere.  Each 
jarty  is  a  free  agent,  with  discretion 
;o  act,  and  only  limited  by  economio 
considerations. 

On  the  other  hand,  how  different 
ivhen  we,  as  shippers,  buy  from  the 
•ailways;    for  here  there  are  not  two 


independent  parties,  with  power  to 
act.  The  function  of  negotiation,  \u 
this  instance,  between  these  two  ele- 
ments (seller  and  buyer)  is  vested  by 
law  in  the  Interstate  Commerce  com- 
mission. 

Sitting  as  a  court  of  arbitration,  so 
to  speak,  the  commission  fixes  the 
price  of  transportation.  Following  the 
testimony  of  all  parties  at  interest 
(and  which  merely  comprises  the 
two — the  selling  railway  and  the 
buying  shipper)  the  "reasonableness" 
of  a  proposed  rate  is  then  determined 
by  the  commission.  What  does  this 
rate,  when  it  emerges  from  this  pro- 
cess, really  mean? 

Apparently,  it  means  nothing  defin- 
ite; for  the  railways  are  not  secur- 
ing an  adequate  price  for  their  com- 
modity— transportation,  and  the  ship- 
per without  knowing  whether  the  price 
is  fair  or  not,  on  general  principles 
objects  to  it — on  the  assumption  that 
it  must  be  high,  because  he  does  not 
know  to  the  contrary — so  inherent  is 
this  instinct. 

Of  necessity,  these  rates  (while  be- 
fore the  commission)  are  discussed  by 
representatives  of  large  groups  or 
classes  of  shippers,  and  who  in  most 
instances  make  the  unhappy  error  of 
assuming  that  when,  as  a  group,  they 
bear  down  the  rate  for  all  hands 
round,  that  is  for  all  shippers,  they  are 
benefiting  themselves,  in  somewhat 
the  same  manner  as  that  of  one  in- 
dividual as  against  another  in  an  open 
competition.  They  completely  over- 
look the  fact  that  stability  of  trans- 
portation rates,  like  stability  of  com- 
modity prices,  is  of  vastly  more  im- 
portance to  them  as  shippers  than  tho 
level  of  rates  themselves. 

These  rates  cannot  remain  stable 
unless  they  are  equitable;  for  stability 
and  equity  are  manifestly  insepaisable 
in  any  form  of  continued  activity,  and 
particularly  where  the  activity  com- 
prises three  such  fundamental  contrib- 
utory elements  as  production,  sale  and 
distribution. 

Imagine  for  a  moment  these  three 
elements  combined  under  one  owner- 
ship arid  management;  would  the  exec- 
utive management  of  such  an  enter- 
prise maintain  two  of  these  elements 
on  a  sound  economic  basis,  and  saddle 
an  insuperable  burden  upon  the  third? 
Would  a  corporation  so  conduct  its  op- 
erations as  to  permit  two  of  its  de- 
partments to  prosper,  while  it  impov- 
erished the  third,  and  which  would  in- 
evitably impair  the  other  two?  And 
yet,  the  principle  governing  all  three 
is,  in  an  economic  sense,  the  same  un- 
der diverse  ownership  as  it  would  be 
under  sole  ownership. 

The  wisdom  and  policy  of  maintain- 
ing the  integrity  and  stability  of  the 


34 


THE  CENTRAL  STATES  CONFERENCE 


triple    alliance    thus    becomes    mani- 
fest. 

In  these  days  of  accelerated  devel- 
opment, we  are  frequently  made  to 
realize  that  we  are  surrounded  by 
forces  or  conditions  vitally  affecting 
our  existence,  but  as  to  the  effect  of 
which  we  have  been  unconsciously  ig- 
norant. 

We  have  spoken  of  the  tripod.  It 
so  happens  that  there  is  another  vital 
element,  not  so  frequently  known  or 
recognized,  but  of  vast  importance, 
and  really  making  it  a  quadruple  al- 
liance. Singularly  too,  this  fourth 
element  proceeds  from  this  same  "ex- 
ternal   partner" — the    railway. 

One  branch  of  the  speaker's  busi- 
ness has  been  in  the  railway  equip- 
ment line.  For  many  years  it  was 
noted  that  the  first  significant  sign  of 
a  revival  of  general  business,  was 
railway  buying — and  its  cessation  one 
of  the  first  signs  of  impending  general 
recession. 

This  became  such  a  settled  convic- 
tion, that  a  means  of  testing  and 
demonstrating  its  accuracy  was  sought. 
A  few  years  ago  I  had  the  curiosity  to 
procure  data  from  the  well  known 
Brookmire  Economic  Service,  of  St. 
Louis.  On  one  occasion  I  said  to  Mr. 
Brookmire  that  I  had  the  idea  that  if 
a  chart  could  be  constructed  indicat- 
ing the  curve  up  and  down  through 
the  years  of  railway  purchases  on  one 
line,  and  the  volume  of  general  busi- 
ness on  the  other  line,  it  would  be 
found  that  an  upward  turn  on  the  rail- 
way purchase  line  was  pretty  regular- 
ly followed  by  an  upward  turn,  of  cor- 
responding magnitude,  upon  the  gen- 
eral business  line;  and  that  when 
railway  purchases  went  down,  general 
business   followed   soon  afterword. 

Mr.  Brookmire  proved  to  have  a 
unit,  measuring  general  business, 
based  upon  an  average  of  a  large  num- 
ber of  commodities.  To  compare  rail- 
way purchases  with  this  unit,  we  ar- 
bitrarily agreed  that  a  representative 
figure  would  be  "car  orders,"  exper- 
ience having  shown  that  when  car 
orders  rise  or  fall,  this  is  accompanied 
by  a  closely  corresponding  fluctuation 
in  the  purchases  of  locomotives,  and 
of  the  various  products  which  are  used 
in  building  and  maintaining  track  and 
structures. 

When  the  chart  was  laid  before  me 
I  was  pleased  to  find  that  my  pro- 
phecy had  come  true  in  an  uncanny 
degree.  Enormoua  in  bulk  are  the 
transactions  of  the  railways.  There 
Is  hardly  a  commodity  which  the  roads 
do  not  buy.  To  remove  from  the  mar- 
ket railway  purchases  of  almost  any 
article,  causes  a  readjustment  in  that 
particular  industry. 

As  our  survey  progresses  into  the 
industries,  a  large  part  or  the  whole  of 


whose  product  is  consumed  by  the  car- 
riers, we  observe  two  things:  Fiii^t, 
that  the  readjustment  amounts  to  a 
convulsion  and  prostration;  second, 
that  this  piostration  of  industry  im- 
mediately brings  distress,  and  in  some 
communities,  disaster  to  every  branrh 
of  trade  and   manufacture. 

In  other  words,  railway  purchasing! 
power  is  so  great  a  factor  in  total  pur-l 
chasing  power  of  the  country  that  itsj 
instability  spells  general  instability. 
Anything  which  affects  the  railways  ad- 
versely is  instantly  communicated  to| 
the   whole   business   structure. 

From  time  to  time  I  have  thought  iti 
worth  while  to  have  this  chart  broughtj 
down  to  date.  In  the  fall  of  1914.  the! 
line  indicating  railway  purchases  sankj 
to  a  point  lower  than  the  point  shown! 
at  any  time  in  1908,  the  previous  low! 
point  for  the  period  covered  by  the! 
chart,  which  begins  with  1901.  The! 
business  index  in  1914  followed  the  rail-l 
way  purchasing  index  down,  with  about! 
three  months  interval,  and  reached  al 
level  lower  than  the  low  point  in  1908.1 
Before  the  end  of  the  year  the  busin<!sal 
index  shot  sharply  upward,  in  advance! 
of  any  upward  trend  in  railway  pur-" 
chases. 

In  the  spring  of  1915  railway  pur- 
chases rose  a  few  points.  In  the  lat- 
ter half  of  1915  wft  had  the  unprecedent- 
ed phenomenon  of  a  business  index  ris- 
ing almost  perpendicularly,  until  in  the 
autumn  of  1916  a  substantially  hi?hor 
point  has  been  reached  than  at  any 
time  in  the  years,  whereas  simultine- 
ously  railway  purchases  turned  sharp- 
ly downward.  Car  orders  in  the  mid- 
dle of  1916  had  reached  a  lower  poini 
even  than  in  the  middle  of  1914.  Hence, 
a  sixteen  year  period  closed  with  the 
business  index  at  the  highest  point  ever 
shown,  and  the  railway  purchases  at  a 
low  point  for  the  period. 

It  has  been  conclusively  shown  that 
under  normal  conditions,  the  vast  rail- 
way purchasing  power,  is  the  funda- 
mental factor  in  the  general  business 
of  the  country. 

So  this  "external  partner"  not  only 
starts  the  wheels  of  business — genera! 
business;   but  controls  its  movement. 

We  now  have  a  structure  supported 
by  four  legs — two  of  which  are  the  rail- 
ways. With  two  legs  impaii-ed,  what 
support  can  the  other  two  legs  give  to 
this  structure? 

The  business  index,  at  the  present 
moment,  has  reached  the  limit  of  the 
barometer,  so  if  it  continues  to  rise,  & 
new  instrument  will  have  to  be  pro- 
vided. The  "railway  purchase"  bar- 
ometer, however,  even  with  the  recent 
large  purchases,  is  still  below  normal. 

But  your  time  need  not  be  consumed 
in  a  discursive  proof  that  the  appar- 
ent exception  involved  in  the  chart  for 


THE  CENTRAL  STAJES  CONFERENCE 


35 


1916  was  due  to  another  gigantic  pur- 
chasing power  coming  into  the  market 
It  a  time  when  the  railways  were  not 
buying — namely,  the  munitions  con- 
tracts and  war  business. 

What  will  be  the  total  purchasing 
power  of  the  American  people  at  the 
close  of  the  war  in  Europe? 

You,  gentlemen,  have  before  you  two 
Jiametrically  opposed  prophecies. 
Profits  have  been  made  in  munitions 
manufacture,  and  in  a  wide  range  of 
niscellaneous  manufacture  and  trade, 
growing  out  of  the  purchasing  power  so 
created.  You  are  asked  by  some  to  be- 
ieve  that  these  profits  will  give  Amer- 
,ca  means  to  continue  the  maintenance 
jf  active  trade.  Another  important 
tem  of  accumulation  of  capital,  you  are 
;old,  will  be  the  retention  in  this  coun- 
:ry  of  great  sums  formerly  sent  annu- 
iliy  to  Europe,  in  the  shape  of  interest 
ind  dividends  upon  American  securi- 
ties held  there,  but  bought  back  by 
Americans  in  the  course  of  the  Euro- 
pean conflict. 

Y'ou  have  been  invited  to  consider 
European  necessities,  in  the  way  of  re- 
jlacing  machinery  and  plant  destroyed 
Dy  the  war,  and  promising  large  con- 
sumption of  American  products.  Those 
vho  emphasize  this  view,  underscore 
ilso  the  scarcity  of  labor  abroad,  due 
;o  death  and  disfigurement  in  the  war, 
issuring,  they  think,  high  labor  cost  in 
Europe,  as  well  as  under-production, 
rhese  factors,  we  are  urged  to  believe, 
vill  make  it  easy  for  the  United  States 
o  compete  with  Europe  in  trade,  after 
he  war. 

From  others,  you  have  the  opposite 
prediction  made  with  equal  positive- 
less.  You  are  reminded  by  them  that 
:he  United  States,  just  prior  to  the 
jutbreak  of  hostilities,  was  in  a  state 
)f  extreme  industrial  depression.  They 
itate  that  nothing  has  occurred  since 
;o  improve  industrial  conditions  in  thi  j 
;ountry,  except  the  war. 

A  new  currency  system,  it  is  admit- 
:ed,  has  gone  into  effect,  and  every- 
body hopes  that  this  will  give  America 
he  same  immunity  from  financial  pan- 
es, which  has  been  enjoyed  by  most 
countries  of  the  world  for  many  years. 
But  it  was  not  a  panic  which  precipi- 
ated  the  condition  which  existed  in  the 
Jnited  States  in  the  middle  of  1914. 
rhere  had  not  been  a  financial  convul- 
jion  since  1907.  In  1913,  business  had 
•eached  a  high  mark.  We  may  have 
videspread  and  prolonged  depression, 
vhether  or  not  precipitated  by  panic. 

The  American  financial  position, 
igain,  we  assurt:  you,  is  not  really  as 
strong  as  it  seems.  Busy  as  a  great 
lart  of  our  industrial  equipment  now  is, 
md  large  as  have  been  some  people's 
profits,  I  need  hardly  say  to  you,  gen- 
tlemen, that  the  manufacture  of  muni- 


tions has  brought  disaster  to  some, 
and  meagre,  if  any,  profit  to  many;  and 
that  there  are  a  number  of  industrial 
plants  not  doing  at  the  present  time 
more  than  a  small  percentage  of  the 
capacity  for  which  they  are  prepared. 

We  warn  you  to  be  alarmed,  more- 
over, at  certain  habits  which  have  be- 
come prevalent  in  America.  There  is 
a  universal  extravagance,  personal  and 
corporate.  This  applies  to  employes, 
but  it  also  applies  to  managers.  Aris- 
ing from  this,  and  other  causes,  there 
is  a  cost  of  doing  business  which  is 
undoubtedly  the  highest  ever  known  in 
any  country,  at  any  time. 

Contrast  this  situation  with  what  we 
see  abroad.  Consult  astute  observers, 
familiar  with  what  has  been  accom- 
plished by  the  warring  nations,  in  or- 
ganization of  their  resources.  They  de- 
clare that  Europe  has  made  great  moral 
gains.  The  warring  nations  have  orga- 
nized their  resources.  They  have  de- 
veloped discipline,  economy,  adaptation, 
of  means  to  ends,  co-operation  of  man- 
agers and  men,  general  co-ordination 
of  energies.  These,  they  assert,  have 
given  Europe  a  productive  capacity,  a 
great  deal  more  than  offsetting  the  loss 
through  death  and  disablement  in  the 
war.  Not  the  least  new  factor  is  the 
labor  of  women. 

Europe,  again  it  is  declared,  has  fully 
restored  the  habit  of  saving,  which  had 
in  some  countries  been  somewhat  re- 
laxed before  the  war.  Those  who  look 
at  it  in  this  way  conceive  Europe  as  a 
group  of  highly  efficient  nations,  drilled 
thoroughly  and  drastically,  capable  of 
accumulating  capital  even  when  doing 
business  at  cut-throat  prices,  ready  to 
repeat  the  miracle  of  the  past  in  the 
direction  of  paying  off  war  debts,  hun- 
gry for  foreign  markets,  and  looking 
with  avaricious  eyes,  not  only  upon 
those  consumers  abroad  throughout  the 
earth  to  whom  America  must  sell  if 
America  is  to  hold  her  ground,  but  up- 
on consumers  in  the  United  States  it- 
self. 

You  have  before  you  these  two  views. 
Some  tell  you  that  the  troubles  of  the 
railways  are  not  your  troubles  as  a 
matter  of  purchasing  power,  because 
prosperity  will  persist  after  the  war  in 
any  event.  On  the  other  hand  you  are 
asked  to  regard  the  troubles  of  the  rail- 
ways as  your  troubles  on  the  score  of 
purchasing  power  because,  it  is  pre- 
dicted, you  will  be  in  the  greatest  pos- 
sible need  of  railway  purchasing  pow- 
er, as  soon  as  the  war  purchasing  pow- 
er is  withdrawn. 

Now  it  is  not  necessary  to  ask  you  to 
espouse  either  of  these  views.  All  that 
I  need  urge  upon  you  is  the  vital  im- 
portance of  doing  the  utmost  that  in 
you  lies,  to  meet  the  situation  which- 
ever   prophecy    proves    inspired.     Here 


36 


THE  CENTRAL  STATES  CONFERENCE 


is  a  great  national  juncture.  Is  it  not 
the  part  of  prudence,  as  it  would  be  in 
a  critical  business  situation  facing  any 
one  of  you  in  his  own  affairs,  to  assume 
the  worst,  and  put  your  house  in  order 
accordingly? 

It  is  not  advocated  that  the  railways 
of  the  United  States  should  be  encour- 
aged or  permitted  to  buy  one  unneces- 
sary dollar's  worth  of  equipment  or  ter- 
minal facilities;  or  to  construct  one  un- 
necessary mile  of  road.  One  of  our 
greatest  sins  as  a  nation  is,  that  we 
buy  thijigs  which  we  don't  need,  and 
which  we  would  be  beter  off  without. 
But  no  such  situation  exists.  It  u.sed 
to  be  the  accepted  scheme  of  things  to 
assign  to  the  railways  a  certain  part 
in  building  up  the  country. 

For  years  and  years  the  roads  have 
not  been  playing  that  part,  but  have 
been  lagging  upon  the  stage;  post- 
poning what  they  could,  patching  up 
what  they  must,  and  all  but  ceasing  to 
grow. 

You  have  been  told,  until  it  must 
have  been  impressed  upon  you,  that 
not  1,000  miles  of  railway  were  built  in 
the  United  States  last  year — the  great- 
est year  in  volume  of  general  business 
for  the  railways  to  carry,  in  our  his- 
tory. 

That  brings  me  to  the  single  provi- 
sion of  law  which  I  have  selected  from 
among  the  many  now  pending  before 
congress  to  call  to  your  special  atten- 
tion. The  phase  I  have  in  mind  has 
nothing  to  do  with  state's  rights.  It 
has  nothing  to  do  with  incorporation,  or 
the  regulation  of  security  issues.  It 
has  nothing  to  do  with  the  organiztaion 
of  the  Interstate  Commerce  commission 
or  any  of  its  auxiliaries.  What  it  has 
to  do  with,  is  the  standard  which  the 
national  legislature  shall  set  by  statute, 
whereby  the  Interstate  Commerce  com- 
mission is  to  measure  railway  earnings 
in  the  regulation  of  rates. 

I  never  drew  a  bill,  or  an  amendment 
to  a  bill,  in  my  life.  To  this  abstinence 
I  attribute  in  part  the  good  health 
which  I  enjoy,  and  such  degree  of  pros- 
perity as  a  gracious  Providence  has  in- 
termittently allowed  me.  I  shall  not 
offer  you  statutory  language.  The  best 
I  can  do  is  to  give  you  what  I  hope  you 
will  regard  as  business  English.  If  I 
were  you  I  would  do  all  I  could  to  pro- 
mote, not  in  the  next  congress  or  the 
congress  after  that,  but  in  the  congress 
which  expires  March  4,  1917,  the  enact- 
ment of  an  amendment  either  in  con- 
nection with  bills  to  meet  the  eight 
hour  situation,  or  to  the  act  to  regu- 
late commerce,  providing  that  the  rule 
for  the  measure  of  earnings  in  regulat- 
ing rates  shall  be  in  substance  the 
same  rule  that  any  board  of  directors 
of   any    business    corporation     on     this 


planet  would  have  to  follow  if  that 
corporation  were  to  thrive  and  grow 
and  perform  the  functions  expected 
of  it. 

Three  alternatives  exist.  One  is  to 
regulate  individual  rates  with  regard! 
to  their  reasonableness  and  with  regard 
to  discrimination  without  considering! 
the  relation  of  total  revenue  to  total) 
expenses.  In  other  words,  bankruptcy! 
and  government  ownership.  If  that  is] 
what  you  want,  you  can  have  it  byj 
leaving  the  law  as  it  stands. 

The  second  alternative,  is  to  ordain 
that  rates  shall  be  high  enough  to  pro- 
duce earnings,  out  of  which  improve- 
ments and  extensions  and  the  develop- 
ment of  territory  not  now  served,  can 
come  without  the  investment  of  new 
capital  through  stocks  and  bonds.  It 
may  be  that  you  gentleman  can  per- 
suade the  congress  of  the  United  States] 
to  pass  such  an  amendment,  but  I  do] 
not  believe  you  can. 

The  third  alternative  is  to  lay  down 
the  rule  that  such  a  rate  structure  shall 
be  permitted  in  every  large  region  tMat 
on  the  average  of  all  the  roads  tra- 
versing that  region,  and  on  the  aver- 
age over  a  period  of  years,  earnings, 
shall  be  sufficient  to  attract  investment! 
for  additions  and  betterments  to  exist- 
ing lines,  and  for  construction  of  new] 
mileage. 

I  do  not  profess  to  prophecy  whether ! 
congress  will  pass  such  an  amendment 
or  not.     I  do  predict  without  hesitation 
that   if   congress   does   not  adopt   such 
an    amendment,    and    adopt    it    at    the 
present  session,  the  end  of  the  war  in 
Europe  will  in  due  course  be  followed  | 
by  an  American  depression  of  the  first  j 
magnitude  in  severity  and  in  length  of  ] 
duration. 

You  had  it  in  1914,  before  this  war 
began.  You  will  resume  it  after  this 
war  is  over,  if  you  do  not  allow  a 
gigantic  purchasing  power  to  take  the 
place  of  the  gigantic  purchasing  power 
which  will  be  taken  out  of  your  mar- 
kets when  munitions  and  war  con- 
trticts  cease  to  operate. 

Therefore,  gentlemen,  the  true  rela- 
tion of  the  shippers  to  the  railway  prob- 
lem, is  to  have  this  problem  solved 
quickly,  fairly,  economically;  but  in 
such  a  way  as  will  place  this  great  in- 
dustry upon  a  proper  business  basis, 
with  that  full  measure  of  prosperity 
which  will  enable  it  to  again  take,  and- 
maintain,  its  proper  position  as  the 
great  fundamental  factor  in  our  na- 
tional prosperity. 

This,  every  shipper  in  the  country 
can  logically  urge  upon  the  broad 
ground  of  "live  and  let  live";  of  equity, 
of  fair  dealing,  further  reinforced,  if 
need  be,  upon  the  most  narrow  ground 
of  "self-interest." 


THE  CENTRAL  STATES  CONFERENCE  37 

The  Conference  then  gave  Mr.  Leigh  a  vote  of  appreciation  and 
thanks.  Announcement  was  next  made  of  the  receipt,  by  special  delivery, 
of  a  brief  statement  from  Mr.  S.  P.  Bush,  President  Buckeye  Steel  Casting 
Co.,  of  Columbus,  Ohio,  and  a  director  of  the  Ohio  Manufacturers  Asso- 
ciation. Mr.  Bush  asked  that  his  letter  be  read  before  the  Conference  and 
the  Chairman  requested  Mr.  Samuel  L  Orr  to  read  the  communication, 
which  follows: 

The  vital  questions  in  connection  with  the  steam  railway  transpor- 
tation interests  of  the  country  that  have  been  brought  prominently  before 
the  public  and  shippers  during  the  past  few  years  have  been  those  of 
railway  regulation,  adequate  revenues  for  the  railways  and  the  settle- 
ment of  controversies  between  the  railways  and  certain  groups  of  their 
employes. 

Railway  Regnlation. 

Not  very  long  since,  the  Ohio  Manufacturers'  Association,  by  reso- 
lution, expressed  itself  in  favor  of  federal  regulation  and  control  of  all 
railways  conducting  interstate  commerce. 

It  further  expressed  itself  in  favor  of  increasing  the  number  com- 
prising the  Interstate  Commerce  Commission  with  the  understanding  that 
such  is  believed  by  the  present  commission  to  be  necessary  and  that  the 
power  of  the  commission  to  regulate  should  be  complete  and  positive  in 
the  matter  of  increasing  as  well  as  decreasing  rates,  and  thus  be  in  posi- 
tion to  establish  some  fair  relation  between  cost  and  operating  revenues. 

It  still  further  believes  that  the  power  to  control  the  issue  of  the  se- 
curities of  interstate  commerce  carriers  should  be  federal  rather  than 
state,  and  that  the  state  power  should  be  confined  to  the  regulation  of 
those  things  that  are  inherently  and  purely  state  matters. 

Briefly,  in  explanation  of  the  foregoing,  the  Ohio  Manufacturers' 
Association  believes  that  regulation  and  operation  of  the  transportation 
interests  of  the  country  should  be  put  on  a  purely  business  and  economic 
basis,  and  freed  from  political  influences  as  far  as  possible,  and  this  we 
believe  can  be  best  accomplished  by  a  larger  measure  of  single  federal 
control  as  against  the  multiple  control  which  we  now  have. 

We  believe  that  with  proper  organization  of  the  federal  power  that 
the  rights  and  interests  of  the  several  states  and  of  the  nation  can  be 
more  consistently  and  uniformly  conserved  than  by  the  present  cumber- 
some and  unbusinesslike  plan. 

As  business  men  we  look  at  the  whole  problem  as  a  business  one  in 
a  business  way,  observing  the  wastefulness  and  inefficiency  of  the  present 
system. 

We  feel  that  the  abuses  of  the  past  have  long  since  been  eliminated 
and  that  our  governmental  policy  toward  all  business,  while  maintaining 
thorough  regulation,  should  be  genuinely  constructive. 

We  manufacturers  of  Ohio  believe  that  if  our  own  industries  are  to 
prosper  that  other  industries  must  prosper;  that  if  we  demand  fair  treat- 
ment and  efficient  regulation  on  the  part  of  the  government  that  we  must 
concede  this  to  all  other  industries. 

Governmental  regulation  in  all  business,  including  transportation,  is 
directed  to  a  wrong  objective  when  not  in  harmony  and  not  promoting  the 
natural  laws  of  business  and  a  maximum  economic  efficiency.  Natural 
laws  and  statutory  laws  must  align  with  each  other. 

We  feel  that  much  of  the  regulation  of  all  business  has  contained  and 
still  contains  an  element  of  vindlctiveness  that  should  be  abolished.  Regu- 
lation of  the  railways  should  have  efficiency  and  the  national  welfare 
as  its  aim,  and  nothing  else.     Prosperity  Is  the  objective  point  and  pros- 


38  THE  CENTRAL  STATES  CONFERENCE 

perity  of  the  various  separate  Interests  is  the  fundamental  basis  for  na- 
tional prosperity,  the  true  safeguard  for  national  welfare. 

Railway  Revenues. 

It  is  a  fundamental  principle  vital  to  the  national  economic  welfare 
that  if  any  considerable  interest  is  not  thriving  fairly  or  able  to  Improve 
and  develop  in  civilization,  that  it  is  harmful  to  all  interests. 

Business  done  at  a  profit  is  the  fundamental  basis  for  individual  and 
national  prosperity,  and  with  this  in  view  where  natural  conditions  make 
it  possible,  we  ask  for  ourselves  and  others  not  to  be  restricted  and  regu- 
lated by  law  so  that  under  fair  average  management  we  cannot  make  a 
profit  that  will  make  it  possible  not  only  for  industry  to  live,  but  to  pro- 
gress and  develop. 

The  railway  transportation  industry  being  such  a  vast  factor  in  con- 
nection with  all  of  the  country's  interests,  should  be  so  regulated  as  to 
make  this  result  possible,  not  only  in  justice  to  the  railway  interests 
themselves  but  in  justice  to  all  other  industries. 

It  is  a  matter  of  vast  importance  that  the  railways  shall  be  per- 
mitted to  co-operate  in  the  greatest  possible  degree  to  the  end  that  waste 
may  be  eliminated  and  efficiency  promoted. 

The  manufacturers  of  Ohio  are  particularly  interested  in  seeing  the 
most  efficient  railway  operation  to  the  end  that  rates  of  railway  trans- 
portation may  not  be  made  any  more  than  is  absolutely  necessary.  See- 
ing as  we  have  in  the  past,  diverse,  conflicting  and  wasteful  regulations 
of  the  several  states,  unnecessary  and  uneconomic  financial  burdens  in 
some  cases,  we  think  that  much  that  is  desirable  may  be  accomplished 
by  regulation  that  is  more  uniform  and  more  free  from  selfish  interest. 

i»  Railways  and  Employes. 

With  reference  to  controversies  between  railways  and  their  employes, 
which  during  the  past  few  years  have  become  more  and  more  acute,  and 
recently  threatening  a  very  general  suspension  of  the  transportation 
service,  the  public  and  shippers  have  been  very  apprehensive. 

The  main  question  involved  in  these  controversies  is  generally  that 
of  wages.  Unquestionably  the  public  desires  to  see  all  of  the  railway  em- 
ployes fairly  compensated  and  otherwise  fairly  treated,  also  that  the  rail- 
ways may  be  fairly  treated,  and  public  sentiment,  it  is  believed,  can  gen- 
erally be  relied  upon  to  throw  its  influence  on  the  side  of  justice. 

Up  to  the  present  time  there  have  been  various  mediation  and  arbi- 
tration proceedings,  but  little,  if  any,  substantial  information  has  come 
to  the  public  from  these;  in  fact,  it  has  been  reliably  stated  that  the  facts 
brought  out  at  these  mediation  and  arbitration  proceedings  could  not  be 
made  public  by  reason  of  an  agreement  between  the  parties  that  they 
should  not  be  made  public. 

With  both  sides  to  these  controversies  asking  for  the  support  of  pub- 
lic opinion  and  the  public  being  such  a  vitally  interested  party,  it  would 
seem  that  the  public  really  has  a  right  to  a  knowledge  of  all  the  facts. 

We  are  very  strongly  in  favor  of  arbitration  in  such  controversies 
between  common  carriers  and  their  employes,  both  as  a  principle  and 
as  a  practice. 

When  such  controversies  arise  it  would  seem  that  a  determination 
of  the  facts  by  a  committee  or  board  composed  of  men  thoroughly  quali- 
fied to  determine  all  of  the  facts  having  any  bearing  on  the  questions  at 
Issue  should  be  made  and  at  least  given  to  the  public,  although  if  such 
committee  had  power  to  render  an  award,   even  though  not  binding  by 


THE  CENTRAL  STATES  CONFERENCE  39 

law,  it  -would  go  far  towards  eliminating  the  possibility  of  railway  tie- 
ups. 

It  would  seem  that  some  form  of  legal  procedure  in  the  determina- 
tion of  the  facts  and  even  the  making  of  an  award  must  be  applicable  to 
these  controversies.  It  seems  strange  that  in  all  of  the  mediation  and  ar- 
bitration proceedings,  held  thus  far,  no  foundation  has  been  laid  in  the 
way  of  standards  for  the  determination  of  fair  compensation.  Certainly 
there  must  be  some  relation  between  the  value  of  the  service  rendered  by 
railway  employes  and  those  engaged  in  other  industries.  The  degree  of 
intelligence,  of  skill,  of  hazard,  of  physical  and  mental  strain  and  reason- 
ableness of  service  requirements  must  be  fairly  determinable,  and  it  does 
not  appear  that  any  of  the  rights  of  either  party  need  be  curtailed  or  taken 
away,  and  undoubtedly  the  public  should  not  be  called  upon  to  suffer 
the  suspension  of  its  transportation  facilities  because  either  side  to  such 
a  controversy  may  have  the  power  to  impose  it  arbitrarily,  when  any  of 
the  questions  involved  can  be  settled  fairly  by  orderly  proceedings,  and 
according  to  common  and  natural  standards. 

We  are,  therefore,  very  strongly  of  the  opinion  that  investigation  and 
publication  of  all  the  facts  bearing  on  such  controversies  prior  to  the 
suspension  of  railway  transportation  should  be  a  lawful  requirement. 
(Applause.) 

Chairman  Murphy  then  explained  to  the  Conference  that  Mr.  John  A. 
Russell,  Dean  of  the  School  of  Comn;ierce  and  Finance  of  the  University 
of  Detroit,  who  was  expected  to  lead  a  discussion,  had  been  unable  to  at- 
tend because  of  an  injury  to  his  eye.  The  Chairman  then  called  on  Mr.  S. 
J.  Roy,  Field  Secretary  of  the  National  Rivers  and  Harbors  Congress, 
who  spoke  on  the  following  subject: 

"Development  of  Our  Watei-^vays." 


40  THE  CENTRAL  STATES  CONFERENCE 


Development  of  Our  Waterways. 

By  Sidney  J.  Roy, 
Field  Secretary  of  the  National  Rivers  and  Harbors  Congress. 

Mr.  Chairman,  Ladles  and  Gentlemen:  I  am  here  attending  this  Con- 
ference on  my  own  invitation.  Whenever  a  field  secretary  of  the  Na- 
tional Rivers  and  Harbors  Congress  hears  of  any  conference  anj-where 
within  the  confines  of  the  republic  that  has  for  its  purpose  the  consider- 
ation of  the  great  fundamental  question  of  transportation,  he  is  expected 
to  buy  a  ticket  to  that  place  immediately.  So  I  was  over  in  Chicago 
yesterday  and  I  came  down  last  night.     I  am  glad  I  am  here. 

I  expect  since  you  have  been  listening  during  this  afternoon  and  this 
evening  to  these  splendid  and  well-prepared  addresses  that  you  feel  very 
much  like  the  toastmaster  did  out  in  Missouri  who  introduced  me  to  an 
audience  one  evening  after  a  dinner.  After  we  had  disposed  of  the  coffee 
and  had  taken  a  cigar  (he  was  a  little  nervous  and  new  at  the  business 
of  being  toastmaster)  he  said,  "Brother  Roy,  shall  I  introduce  you  now 
or  shall  we  continue  to  enjoy  ourselves  a  while  longer?"      (Laughter.) 

I  haven't  any  prepared  address  for  you  and  I  feel  a  little  embarrassed 
following  these  five  or  six  splendidly  prepared  and  brilliant  addresses  on 
the  great  question  of  transportation.  I  feel  very  much  like  two  famous 
men  did  when  they  met  in  Chicagp.  One  of  them  was  from  my  town. 
Mark  Twain  was  introduced  to  General  Grant,  and  Mark  said,  "General, 
I  am  embarrassed.  Are  you?"  After  the  General  became  President  of 
the  United  States  and  after  he  had  been  President  he  went  around  the 
world  and  when  he  came  back  by  way  of  'Frisco  over  to  Chicago  the  Grand 
Army  of  the  Republic  had  a  great  banquet  at  the  old  Palmer  House. 
Everybody  of  any  distinction  in  the  army  was  there  and  they  invited  that 
great  Missourian  to  be  a  guest.  Mark  Twain  met  the  General  for  the  first 
time  in  quite  a  number  of  years,  the  only  time  in  fact  since  he  had  met  him 
and  made  that  remark.  He  met  him  now  in  the  presence  of  that  great 
audience  that  was  welcoming  the  victorious  general  and  the  great  presi- 
dent on  his  return  from  around  the  world.  The  General,  you  know,  had 
a  very  tenacious  memory  and  he  said  ,"Mark,  I  am  not  embarrassed.  Are 
you?"  (Laughter.)  So  I  am  not  going  to  embarrass  you  this  evening  and 
I  am  not  going  to  be  embarrassed  either.  I  am  going  to  start  talking 
waterways  right  now. 

In  all  this  waterway  business  and  transportation  business  in  the 
United  States,  I  mean  railway  and  water  transportation  which  has  de- 
veloped during  the  last  forty  years,  its  development  and  growth  has  been 
the  most  wonderful  thing  on  this  continent.  I  sometimes  think  that  it 
has  developed  a  good  deal  like  a  negro  down  in  Oklahoma  said  about  the 
Rock  Island  railroad.  A  traveling  man  went  down  to  the  station  and 
met  Jim,  the  porter  of  the  hotel,  and  he  said,  "Jim,  is  this  the  Rock  Island 
System?"  Jim  says,  "No,  sir,  this  ain't  the  Rock  Island  System."  The 
traveling  man  said,  "You  mean  to  say  that  this  is  not  the  Rock  Island 
system?  Isn't  it  the  Rock  Island  railroad?"  Jim  says,  "Oh,  yes,  sir, 
this  is  the  Rock  Island  railroad,  but  we  never  had  no  system  connected 
with  it."      (Laughter.) 

Now,  there  has  been  a  good  deal  of  lack  of  system  in  developing  our 
railways  and  a  good  deal  of  lack  of  system  in  developing  our  waterways. 

There  are  three  kinds  of  transportation:  Railways,  waterways  and 
highways.  A  community  must  have,  if  it  would  prosper,  all  three  kinds 
of  transportation  developed  to  their  highest  point  of  efficiency.  Now,  the 
great  trouble  with  most  of  the  American  communities  is  that  they  only 
have  one  kind  of  transportation.     Now,  down  here  in  Southern  Indiana, 


THE  CENTRAL  STATES  CONFERENCE  41 

you  only  have  one  kind,  and  in  that  way  you  are  a  good  deal  like  the  other 
states  of  the  Union.  You  have  the  right-of-way  for  some  highways;  but 
only  a  few  highways.  You  have  the  right-of-way  for  a  waterway  out  here 
but  you  are  waiting  patiently  for  the  government  to  build  it  for  you. 

Now,  during  the  last  forty  years  the  building  of  two  hundred  and  fifty 
thousand  miles  of  railways  has  absorbed  the  imagination,  the  energies 
and  the  finances  of  the  continent.  Down  on  the  banks  of  the  Ohio,  up  on 
the  lakes  and  everywhere  else,  you  have  almost  forgotten  the  kind  of 
transportation  out  of  which  this  civilization  came.  This  splendid  town 
here,  the  men  who  laid  its  foundation,  came  here  by  waterway;  and  this 
splendid  little  metropolis  of  southern  Indiana  will  only  have  its  maximum 
development  as  an  industrial  and  commercial,  intellectual  and  social  cen- 
ter when  it  has  developed  its  maximum  in  the  carrying  of  freight  on  the 
great  Ohio  river. 

You  know  there  have  been  some  empire  builders  in  this  country.  In 
1827  when  New  York  built  the  Erie  Canal  it  built  the  most  far-reaching 
piece  of  internal  improvement  ever  built  in  any  country  in  the  world.  Its 
influence  on  commercial  and  industrial  development  on  this  continent  has 
been  the  most  profound  of  any  other  public  work.  When  that  canal  was 
built  New  York  was  the  smallest  of  the  three  large  cities  in  this  country, 
Philadelphia,  Boston  and  New  York.  A  few  years  after  that  canal  was 
built  New  York  began  to  grow  as  a  jobbing  center  and  then  as  a  manu- 
facturing center  and  then  as  a  financial  center  and  then  as  an  intellectual 
center  and  s.s  a  printing  center,  until  today,  with  this  continent  back  of 
it,  it  is  the  financial,  intellectual  and  culture  center  of  the  world,  made  so 
and  made  possible  by  a  little  strip  of  water  across  the  state  of  New  York 
that  tapped  the  great  inland  waterways,  the  lakes,  and  literally  compelled 
a  great  continent  to  throw  its  tonnage  into  the  Hudson  and  pay  toll  to  New 
York,  at  a  cost  of  $27,000,000.  Right  now,  not  yesterday,  and  not  to- 
morrow, but  today,  the  state  of  New  York  is  spending  $150,000,000  of  its 
own  money  to  build  the  Erie  canal  into  the  state  barge  canal.  Why  is  it 
building  it?  Just  for  fun?  Just  to  spend  the  money?  Why,  no;  they  are 
rebuilding  the  Erie  canal  into  the  state  barge  canal,  not  to  build  New 
York,  but  in  order  that  New  York  may  continue  to  compel  the  great  north- 
western territory  to  send  its  tonnage  out  into  the  commerce  of  the  world 
through  the  port  of  New  York  and  continue  to  pay  toll  to  New  York  . 

The  first  railway  freight  rate  made  in  the  United  States  to  compete 
with  the  waterway  was  made  by  the  New  York  Central  railroad  to  com- 
pete with  that  little  strip  of  water  across  the  state  of  New  York  and  then 
an  ingenious  freight  clerk  out  in  Buffalo  said,  "Here,  if  you  can  carry  it 
here  why  not  carry  it  on  further  and  compete  a  little  further  west?"  So 
they  extended  that  rate  by  percentage  out  to  Chicago  and  by  virtue  of  the 
Erie  canal  and  the  lakes  Chicago  became  the  center  of  the  earth  so  far 
as  freight  rates  is  concerned.  You  know  that.  You  shippers  especially 
know  that.  It  is  like  the  zenith  city  of  fame  and  story,  so  near  the  center 
of  the  earth  that  the  horizon  comes  down  at  the  same  distance  all 
around  it,  and  the  commerce  comes  down  at  the  same  distance  all  around 
Chicago. 

Now,  let  me  call  your  attention  to  a  little  thing.  In  the  early  devel- 
opment of  this  country  the  Ohio  river  was  a  great  highway.  It  was  not  a 
navigable  stream  but  they  used  it  as  a  navigable  stream  at  times.  It  was 
not  dependably  navigable.  But  our  ancestors  out  in  Missouri  all  came 
by  here  on  their  way  out  into  Missouri  and  back  again  into  Kentucky  and 
Virginia.  Pittsburgh  started  and  grew  by  water  transportation  and  ac- 
cumulated population  and  wealth,  and  then  the  railroads  came.  Cincin- 
nati the  same  way.  Old  Louisville  started  by  the  falls  of  the  Ohio  river. 
But  during  the  last  two  decades  that  row  of  towns,  starting  with  Pitts- 
burgh, Cincinnati,  Louisville,  Evansville,  and  St.  Louis  have  been,  not 
standing  still,  but  they  Bave  not  been  growing  like  they  ought  to  grow. 
But  at  the  same  time  old  Buffalo  has  been  growing  twice  as  fast  as  Pitts- 


42  THE  CENTRAL  STATES  CONFERENCE 

burgh.  Cleveland  has  outstripped  Cincinnati  about  three  to  one,  and  De- 
troit, you  know,  has  passed  Louisville.  They  are  not  mentioned  in  the 
same  class  as  growing  American  cities.  And  Chicago  has  passed  St.  Louis 
until  they  are  not  mentioned  in  the  same  class  as  great,  growing  Ameri- 
can cities  . 

What  is  the  reason?  That  row  of  cities  on  the  lakes  has  all  kinds 
of  transportation  developed  to  their  highest  point  of  efficiency.  The  most 
efficient  railroads  on  this  continent  or  any  other  continent  has  are  the 
railroads  that  parallel  the  most  efficient  waterways  and  you  will  find 
them  along  the  lakes.  You  know  that  row  of  cities  on  the  Ohio  river.  If 
you  will  look  into  it  you  will  find  they  have  not  been  growing  like  you 
hoped  they  would  grow  and  they  will  not  grow  in  the  future  unless  they 
have  the  same  kind  of  transportation  that  the  other  fellow  has,  and  they 
can't  have  it  unless  the  Ohio  river  is  canalized  for  nine  feet  and  opened 
to  dependable  navigation.      (Applause.) 

Now,  here  is  the  situation.  I  am  not  going  to  go  into  the  details  or 
the  reasons  why  waterway  transportation  is  cheaper  and  more  economical 
than  railways.  We  have  got  to  have  them  both.  No  advocate  of  water- 
way development  in  this  country  who  is  worthy  to  be  in  it  is  going  to  de- 
cry railroads.  We  need  them.  We  are  compelled  to  have  them.  We  want 
them,  but  we  want  them  to  come  along  and  work  with  the  waterways. 
Now,  I  am  not  afraid  about  their  going  to  do  it.  About  ten  or  twelve 
years  ago  it  was  quite  the  popular  thing  among  railroad  men  to  decry 
waterways;  but  the  great  propaganda  that  has  been  growing  all  over  this 
country  during  that  time  has  educated  the  railroad  men  the  same  as  it 
has  educated  the  rest  of  us,  until  the  owners  of  the  railroads  and  the 
operators  of  the  railroads  are  now  conceding  that  the  rivers  and  lakes 
and  these  vast  improvements  should  all  be  built  up  and  made  to  serve 
the  growing  commerce  that  is  here  and  the  still  greater  growing  and  stu- 
pendous commerce  that  is  to  come.  They  must  work  together.  As  I  say, 
I  am  not  afraid  that  they  are  going  to  w^ork  together.  The  waterways  of 
the  country  are  owned  by  the  people  of  the  United  States.  The  railways 
are  owned  by  the  people  of  the  United  States.  And  we  are  going  to  com- 
pel both  of  them  to  serve  the  highest  ends  of  modern  civilization.  (Ap- 
plause.) 

There  are  some  tendencies  going  on  in  this  country  of  ours,  and  I  am 
not  going  to  speak  but  just  a  moment,  Mr.  Chairman.  The  railroads  can 
only  do  about  so  much  to  serve  a  certain  territory.  Now,  you  take  the 
great  Mississippi  river;  we  had  hoped,  you  had  hoped  in  Evansville,  we 
had  hoped  over  in  Missouri,  and  they  had  hoped  up  in  Illinois,  up  in 
Ohio,  that  this  great  valley  would  grow  and  become  the  great  dominating 
industrial  center  of  the  world.  We  all  had  hoped  individually  that  the 
Ohio  valley  and  that  the  Mississippi  valley  would  grow  and  become  the 
great  industrial  and  dominating  centers.  You  know  they  are  not  doing 
it  just  like  you  would  like  to  have  them  do  it.  Now,  why  is  it  they  are 
not  doing  it? 

Let  me  give  you  an  illustration  which  might  in  a  way  show  you  the 
reason  why  they  are  not  doing  it.  Over  in  Kansas  City  is  the  Peet  Broth- 
ers' soap  factory,  which  is  a  bi-product  of  the  live  stock  business  of  Kan- 
sas and  Missouri  and  Nebraska.  When  the  Panama  Canal  was  opened  up 
the  rate  up  to  'Frisco  and  Oakland,  California,  was  eighty  cents.  The  in- 
tercostal rate  from  Oakland  to  'Frisco  was  forty  cents.  It  meant  that  the 
soap  from  Kansas  City  would  not  be  used  to  cleanse  the  Pacific  Coast. 
Now,  what  happened?  The  Peet  soap  factory  has  just  completed  the 
building  of  a  $250,000.00  soap  factory  in  Oakland,  California.  What  does 
that  mean?  That  means  the  transferring  from  Missouri  of  $250,000.00 
of  invested  capital  and  putting  it  out  on  the  Pacific  Coast.  What  further 
does  that  mean?  That  means  further  the  employment  on  ihe  Pacific 
Coast  for  those  people  in  the  making  of  soap  in  that  factory.     It  will  mean 


THE  CENTRAL  STATES  CONFERENCE  43 

that  the  people  from  Kansas,  and  from  Missouri  and  from  Nebraska  will 
move  out  there  to  get  employment  in  that  factory.  It  will  mean  the  tak- 
ing away  of  just  so  much  wealth  from  the  Kansas  City  district.  What 
does  that  mean  further?  It  means  that  the  life  in  the  Mississippi  river 
valley  will  not  be  as  progressive,  will  not  grow.  It  will  mean  further 
that  Oakland,  California,  and  the  Pacific  Coast  will  get  this  growth,  that 
the  people  will  go  there,  will  spend  their  money  there,  and  will  educate 
their  families  in  California. 

Another  example  of  that  kind:  The  Proctor  and  Gamble  Soap  Com- 
pany of  Cincinnati,  Ohio,  had  to  build  on  the  Atlantic  Coast  a  soap  fac- 
tory in  order  to  hold  its  business.  Why?  Because  it  could  not  compete 
on  account  of  the  freight  rates. 

So  you  keep  on  with  the  process.  The  rates  on  manufactured  pro- 
ducts from  this  city  here  in  the  state  of  Indiana  are  such  that  if  you  have 
a  competitor  in  the  same  line,  if  you  have  close  competition  and  work  on 
a  close  margin  against  a  competition  on  the  Atlantic  or  Pacific  Coast, 
that  you  can't  enter  in  the  South  American  countries.  Why,  you  can't  get 
in  this  country,  into  the  southern  part  of  this  country  as  against  New 
York.  Do  you  know  that  New  York  and  Boston  and  Philadelphia  can 
ship  shoes  from  Lynn,  Massachusetts,  to  the  south  at  twenty-four  cents 
a  hundred,  cheaper  than  the  St.  Louis  man  can  ship  them  to  your  back 
door?  It  is  simply  because  of  the  waterways.  The  rate  on  wire  screen 
shelving  for  refrigerators  from  Clinton,  Iowa, — this  is  a  humble  thing  I 
am  giving  you,  but  it  is  the  God's  truth — $2.80  to  'Frisco  from  Clinton, 
Iowa;  $1.60  sent  through  New  York,  around  through  the  Panama  Canal 
to  San  Francisco.  What  was  the  result?  A  shipment  of  1450  pounds 
went  around  through  New  York,  a  saving  of  36  per  cent,  on  freight  rates, 
and  a  saving  of  18  per  cent,  on  the  value  of  the  invoice.  Can  the  manu- 
facturing and  industrial  lives  of  this  great  valley  stand  that?  You  can't 
do  it;  and  railroads  cannot  give  you  the  relief.  The  only  thing  that  can 
relieve  you  is  the  enactment  and  the  enforcement  of  the  law,  and  the  edu- 
cation of  the  men  who  own  the  railroads,  to  build  and  develop  the  water- 
ways and  the  railroads  and  compel  both  of  them  to  work  together  and 
serve  you  and  serve  this  great  valley.  That  is  the  only  solution  for  get- 
ting your  commerce  out  into  the  world. 

What  is  the  result  if  you  don't  get  it  out?  During  the  last  census 
decade  you  thought  you  were  going  to  increase  in  population  and  power 
and  have  more  to  do  with  the  government  of  this  great  republic  than  you 
have  ever  had  before,  but  on  account  of  the  transportation  facilities  along 
the  coast  the  population  piled  up  along  the  coast,  because  they  could  do 
business  there  better  and  cheaper  than  you  could  in  the  interior.  You 
can  do  a  domestic  business  satisfactorily,  inside  your  own  states,  but  the 
next  great  spurt  in  growth  in  this  country  In  manufacturing  Is  going  to 
be  Incidental  to  your  participation  in  the  great  foreign  commerce  of  this 
continent.  And  what  chances  are  you  going  to  have  In  that,  unless  you 
have  the  same  equipment  for  participating  In  the  foreign  commerce  that 
the  other  fellow  has,  and  you  can*t  have  It  unless  you  can  assemble  ma- 
terials of  manufacture  In  your  community  as  economically  as  they  can 
be  assembled  In  the  other  fellow's  community.  And  unless  you  are  able 
to  distribute  the  products  of  that  factory  into  the  uttermost  parts  of  the 
country  as  economically  as  they  can  be  distributed  from  any  other  part  of 
this  country  or  any  other  country,  you  are  not  going  to  participate  in  that 
growth. 

Now,  here  is  the  final  result.  If  you  can't  hold  the  manufacturing 
in  the  Mississippi  valley  the  great  population  will  drift  out  to  the  shore 
line  and  there  will  go  the  accumulated  wealth  of  the  nation  and  we  will 
be  paying  toll  to  the  outside. 

What  is  the  final  result?  The  great  universities  and  art  galleries 
and  things  that  dominate  the  finer  life  of  the  American  continent  will  be 


44  THE  CENTRAL  STATES  CONFERENCE 

built  where  the  accumulated  wealth  is.  If  we  are  going  to  build  up  in 
Indiana,  in  Ohio,  in  Illinois  and  Missouri  and  in  Kentucky,  in  this  great 
rich  valley  here,  we  must  have  the  transportation  facilities.  We  must 
have  the  facilities  for  the  transaction  of  business,  just  as  good  and  a  little 
better  than  the  other  fellow  has.  If  we  don't,  the  wealth  of  the  country 
will  go  to  that  place  that  has  the  transportation  facilities. 

The  one  hope  of  this  valley  is  the  building  and  the  welding  together 
of  all  kinds  of  transportation  and  compelling  them  by  law  to  serve  the 
great  ends  of  this  civilization.     I  thank  you.      (Applause.) 

Following  Mr.  Roy's  address  Mayor  Bosse  took  the  floor  and  outlined 
the  plans  for  the  complimentary  banquet  scheduled  the  following  evening. 
The  meeting  then  adjourned  until  Friday  morning. 


FRIDAY  MORXIXG  SESSION. 
December  15,  1916. 


Chairman  Murphy  called  the  meeting  to  order  at  10  a.  m.  and  aftei 
a  few  general  instructions  requested  Mr.  Robert  L.  McKellar,  of  Louis- 
ville, Ky.,  Director  of  the  Louisville  Board  of  Trade  to  preside.  Mr.  Mc- 
iCellar,  upon  taking  the  chair,  spoke  as  follows: 

Mr.  Murphy,  and  Gentlemen:  First,  you  will  let  me  say  that  I  am 
a  director  of  the  Louisville  Board  of  Trade  and  the  delegate  to  this  con- 
ference from  that  organization  and  I  wish  to  extend  from  that  association 
greetings  to  the  Evansville  Chamber  of  Commerce  and  other  bodies  that 
are  making  this  conference  such  a  constructive  one,  and  such  a  success, 
and  to  congratulate  this  city  upon  being  to  the  front  in  calling  a  confer- 
ence of  this  kind. 

As  a  member  of  the  railroad  fraternity  I  also  wish  to  thank  the 
chairman  of  the  conference  for  the  honor  conferred  upon  our  fraternity 
by  selecting  one  of  its  members  to  preside  at  this  session  this  morning, 
Evansville  is  quite  popular  with  the  railroad  fraternity  and  any  railroad 
that  has  not  a  line  into  Evansville  is  either  blind  to  its  own  interests  or 
else  so  unfortunate  as  to  not  have  recognized  the  value  of  Evansville  and 
built  into  here  before  the  time  came  when  railroad  securities  were  unde- 
sirable as  investments. 

I  want  to  say  a  word  or  two  more  about  Evansville,  if  I  may  be  per- 
mitted. The  products  of  the  mills  and  factories  of  Evansville  go  all  over 
this  country,  from  Maine  to  California,  and  from  the  lakes  to  the  gulf, 
from  Canada  to  South  America,  to  the  wheat  fields  of  Russia  and  the  rice 
fields  of  the  Orient.  It  is,  therefore,  very  proper  that  Evansville  should 
take  the  lead  in  studying  a  question  that  the  whole  country  is  now  con- 
sidering— transportation.  I  don't  suppose  that  there  ever  has  been  a 
period  in  the  history  of  this  country  when  the  question  of  transportation 
was  being  studied  as  intensively,  seriously  and  as  generally  as  it  is  being 
studied  at  the  present  time.  The  reason  for  that  is  that  we  are  up  against 
the  necessity  for  studying  this  question.  I  am  not  going  to  touch  on  our 
greatest  troubles,  how  they  would  be  relieved.  Others  have  thought  that 
out  and  will  have  something  to  say  on  that.  But  I  wish  to  have  a  little 
something  to  say  or  a  few  words  to  say  in  regard  to  the  troubles  of  the 
recent  past,  present  and  the  near  future  in  the  way  of  car  shortage.  That 
is  what  is  pressing  us  mostly  at  the  present  time. 

In  the  latter  part  of  October  the  car  shortage  became  very  acute  and 
it  became  necessary  for  the  railroads  all  over  the  country,  as  well  as  the 
shippers,  to  begin  to  study  the  question  as  to  how  cars  could  be  distributed 


THE  CENTRAL  STATES  CONFERENCE  45 

so  as  to  take  care  of  the  immediate  needs  of  commerce.  The  interstate 
commerce  commission,  under  Commissioner  McCord,  held  a  meeting,  a 
car  shortage  hearing  in  Louisville,  lasting  from  November  3rd  until  No- 
vember 22nd,  a  total  of  fifteen  days,  with  two  sessions  and  sometimes 
three  sessions  a  day.  Notwithstanding  the  fact  that  that  is  a  good  long 
while  to  give  to  the  special  study  of  one  subject,  almost  that  entire  time 
was  taken  up  in  considering  the  shortage  of  coal  cars  alone.  The  short- 
age in  box  cars  was  hardly  referred  to  until  the  latter  part  of  the  con- 
ference. Representative  carriers  from  all  over  the  United  States  were 
present  at  that  hearing,  as  were  the  interested  shippers.  The  question  was 
gone  into  very  thoroughly,  with  the  result  that  when  they  adjourned  on 
the  22nd  of  November  it  was  to  reconvene  in  the  City  of  Washington,  to 
take  up  at  that  point  the  question  for  further  study  in  connection  with 
what  is  termed  an  efficiency  committee  appointed  by  the  American  Rail- 
way Association.  That  efficiency  committee  is  composed  of  four  railroad 
representatives  and  one  representative  from  the  American  Railway  Asso- 
ciation. For  the  south  and  southwest  Mr.  Worthlngton  of  the  Southern 
Pacific  has  been  appointed  on  that  committee.  From  the  northwest  Mr. 
W.  L.  Park,  of  the  Illinois  Central,  has  been  appointed.  For  the  east  Is 
Mr.  Shaeffer  of  the  Pennsylvania  railroad,  and  for  the  south  is  Mr.  Coap- 
man  of  the  Southern  railway.  Mr.  Hodges  is  Chairman  of  that  committee 
and  he  represents  the  American  Railway  Association,  therefore  represent- 
ing all  of  the  carriers.  Working  with  that  committee  is  chairman  Mc- 
Cord, who  was  in  charge  of  the  Louisville  hearing,  and  Frank  S.  P.  Dow, 
who  was  also  associated  with  Mr.  McCord  at  the  Louisville  hearing. 

This  efficiency  committee  is  studying  every  phase  of  the  car  short- 
age problem  and  from  day  to  day  is  issuing  such  orders  as  it  thinks  will 
bring  about  a  better  distribution  of  cars  in  order  to  relieve  the  car  short- 
age throughout  the  various  parts  of  the  country. 

It  is  my  suggestion  that  if  any  community,  or  if  any  set  of  shippers 
feel  that  the  car  situation  Is  not  being  properly  handled,  for  them  to  com- 
municate with  this  efficiency  committee  and  let  their  wants  and  their 
troubles  be  known. 

As  I  say.  It  is  not  my  intention  to  go  into  the  transportation  subject, 
but  as  a  railroad  man  I  wish  to  say  just  a  word  or  two  In  connection  with 
water  transportation. 

I  believe  at  one  time  it  was  the  general  feeling  that  the  railroads 
were  all  opposed  to  any  consideration  of  the  Inland  waterways.  In  my 
opinion,  that  has  long  since  become  an  exploded  theory.  There  is  no  ob- 
jection whatever,  so  far  as  I  know,  on  the  part  of  the  railroads  to  the  Im- 
provement of  the  inland  waterways.  A  number  of  the  railroads  are  co- 
operating in  that  effort;  and  I  hope  that  if  any  such  thought  still  remains 
In  the  minds  of  some  people,  that  the  carriers  as  a  whole  are  in  opposition 
to  the  Improvement  of  the  waterways,  that  that  impression  may  be  dis- 
missed as  unfounded. 

In  mentioning  the  connection  of  Evansvllle  with  this  important  ques- 
tion of  transportation  and  her  activity  and  aggressiveness  in  going  Into 
the  question,  while  it  is  a  live  one,  I  also  wish  to  congratulate  the  people 
of  Evansvllle  on  the  work  of  their  Mayor.  He  has  certainly  to  the  out- 
side world  placed  Evansvllle  on  the  map  and  I  think  he  is  doing  his  full 
part  toward  keeping  it  there.  We  congratulate  him  and  you  are  to  be 
congratulated  in  having  such  a  man  at  the  head  of  your  city  affairs. 

If  I  understood  the  wishes  of  our  chairman  a  few  moments  ago.  It 
was  that  until  the  arrival  of  the  next  speaker  that  we  should  have  short 
talks  from  different  ones  In  the  audience  who  would  like  to  be  heard  on 
the  question  of  transportation.  I  will  now  invite  five  minute  talks  from 
anyone  in  the  audience  who  wishes  to  be  heard  on  this  subject.  I  hope, 
gentlemen,  that  you  will  not  be  backward  in  coming  forward. 


46  THE  CENTRAL  STATES  CONFERENCE 

Mr.  Charles  C.  Gilbert,  (Secretary  Tennessee  Manufacturers'  Asso- 
ciation, Nashville,  Tennessee) :     Mr.  Chairman. 

Chairman  McKellar:      Mr.   Gilbert. 

Mr.  Charles  C.  Gilbert:  It  Is  my  pleasure  to  attend  this  conven- 
tion as  a  representative  of  the  Tennessee  Manufacturers'  Association  and 
on  behalf  of  that  organization  I  want  to  congratulate  and  compliment  the 
Chamber  of  Commerce  of  Evansville,  backed  by  its  splendid  citizenship 
for  its  forethought  in  arranging  for  this  conference. 

I  want  to  say,  Mr.  Chairman,  and  to  you,  gentlemen,  that  it  omens 
well  for  the  welfare  of  this  country  when  business  interests  will  gather 
together  in  a  conference  like  this  to  discuss  a  question  that  is  of  such 
great  importance  to  the  upbuilding  and  development  of  this  great  coun- 
try. 

The  Tennessee  Manufacturers'  Association  looks  upon  this  question 
of  transportation  as  going  hand  and  hand  with  the  development  of  our 
stafe,  and  never  for  once  will  that  organization  submit  a  stumbling  block 
to  be  thrown  in  the  way  of  the  development  and  the  upbuilding  of  the 
transportation  systems  and  facilities  in  our  state.  We  have  three  means 
of  transportation  throughout  Tennessee  that  we  are  encouraging:  Name- 
ly, the  rail,  the  river  and  the  highway.  Never  do  we  lose  an  opportunity 
to  foster  any  of  these  movements  that  will  tend  toward  their  improve- 
ment. 

Mr.  Chairman,  I  want  to  say  further  that  the  manufacturers  of  this 
great  section  of  our  country  cannot  afford  to  arrest  and  embarrass  the 
transportation  systems  of  the  south,  because  the  railroads  and  the  river 
transportation  systems  go  hand  in  hand  with  the  manufacture  of  our 
products.     (Applause.  ) 

Now,  in  our  state,  in  the  state  of  Tennessee,  we  have  at  least  thirty 
counties  that  are  not  touched  by  rail  or  river.  The  goods  that  are  pro- 
duced in  those  counties,  the  raw  materials  that  the  manufacturer  needs 
so  badly,  must  be  transported  overland.  I  want  to  tell  you  during  the 
last  ten  years  that  the  railroads  have  not  developed  in  the  south.  Their 
percentage  of  construction  has  been  distressingly  small.  I  am  ashamed 
for  our  own  state  in  that  regard.  Tennessee  has  constructed  fewer  miles 
of  railroad  during  the  last  ten  years  than  any  of  the  southern  or  central 
states.  We  attribute  that  largely  to  the  demagogues  that  exist  in  our  state. 
I  have  served  in  our  legislature  in  Tennessee  and  I  have  sat  there  and  lis- 
tened to  the  demagogue  as  he  would  face  the  gathering  and  lift  his  voice 
almost  to  the  sky  and  damn  the  railroads  from  start  to  finish  just  to  hear 
the  applause  from  the  gallery. 

My  friends,  we  have  got  to  stop  that  kind  of  business.  This  railroad 
proposition  is  a  business  proposition  and  until  the  business  interests  of 
this  country,  the  people  of  this  country  realize  that  unless  the  railroads 
are  left  alone  and  assisted  in  their  construction  and  development,  the 
manufacturing  industries  and  its  various  interests  that  are  dependent  up- 
on the  development  of  our  resources,  unless  those  interests  are  encour- 
aged, then  our  country  is  not  going  to  go  forward  as  it  should  go  for- 
ward. When  the  great  war  is  over,  and  it  is  going  to  be  over  some  of 
these  days,  this  country  is  going  to  be  looked  upon  as  the  greatest  coun- 
try under  the  sun,  if  it  is  not  looked  upon  in  that  light  at  the  present 
time.  We  must  take  advantage  of  the  opportunity.  We  must  lock  and 
dam  our  rivers  and  we  must  encourage  the  building  of  railroads  until 
every  section  of  the  whole  country  is  touched  by  some  branch  of  one  of 
our  splendid  systems  of  railroads.  Our  association  in  the  old  Volunteer 
State  is  doing  everything  it  can  to  encourage  these  means  of  transpor- 
tation, not  for  our  good,  but  for  the  good  of  the  men,  women  and  chil- 
dren who  live  In  that  state  and  the  states  that  touch  our  borders. 


THE  CENTRAL  STATES  CONFERENCE  47 

We  are  glad  to  compliment  Evansville  and  you  people  from  other 
states  who  have  given  of  your  time  and  efforts  towards  making  this  con- 
ference a  success.  * 

Mr.  Murphy:  Mr  Chairman,  I  desire  to  read  Into  the  record  a  tele- 
gram I  have  had  from  Theodore  N.  Vail,  President  of  the  American  Tele- 
phone &  Telegraph  Company.  He  says,  "The  questions  you  propose  to 
discuss  are  the  most  Important  ones  now  before  the  country.  Upon  the 
wisdom  of  their  handling  and  ultimate  settlement  largely  depends  our 
immediate  future.  I  can  only  express  my  highest  appreciation  of  your 
invitation  to  address  your  meeting  and  deeply  regret  that  I  am  forced 
to  decline  owing  to  an  unexpected  call  from  the  country  on  important 
business.  THEODORE  N,  VAIL." 

(Applause.) 

Chairman  McKellar:  Gentlemen,  I  am  sure  you  all  enjoyed  hearing 
from  the  Tennessee  Manufacturers'  Association  and  the  message  that  they 
had  to  deliver  to  us  today.  Next  to  Kentucky  is  Tennessee.  Is  Mr.  Law- 
rence Finn  of  the  Kentucky  Railroad  Commission  in  the  audience? 

Mr.  Lawrence  Finn:  Mr.  Chairman,  I  thank  you  very  much  for 
calling  on  me,  but  I  want  to  take  some  of  your  time  this  afternoon.  I 
might  possibly  request  you  to  listen  to  me  then  and,  therefore,  I  would 
not  care  to  impose  on  you  now. 

Chairman  McKellar:  We  shall  be  glad  to  listen  to  Mr.  Finn  at  any 
time  he  desires  to  address  us.  Will  Mr.  L.  K.  Webb,  of  Louisville,  Ken- 
tucky, give  us  a  few  words? 

Mr.  L.  K.  Webb,  (Manager  Cumberland  Telephone  Company,  Louis- 
ville, Kentucky).  Mr.  Chairman  and  gentlemen:  I  think  that  inasmuch 
as  the  Louisville  delegate  was  made  chairman  of  this  convention  this 
morning  that  our  city  is  amply  represented.  I  will  not  take  up  any  of 
ycur  time.  However,  I  appreciate  the  opportunity  of  coming  to  Evans- 
ville and  would  like  to  come  back  again  for  this  purpose.  I  do  congratu- 
late you,  gentlemen,  on  this  convention. 

Chairman  McKellar:  Is  Mr.  J.  C.  Clair,  of  the  Illinois  Central  Rail- 
road of  Chicago,  Illinois,  in  the  audience?  If  so,  we  will  be  pleased  to 
hear  from  Mr.  Clair. 

Mr.  John  C.  Clair:  (Industrial  and  Immigration  commissioner,  Illi- 
nois Central  Railroad,  Chicago,  Illinois.)  Mr.  Chairman  and  gentlemen: 
Against  my  physician's  orders  I  am  here  this  morning,  but  in  view  of  the 
request  of  our  vice-president,  Mr.  F.  P.  Bowes,  in  charge  of  traffic,  and 
our  freight  traffic  manager,  in  view  of  their  wishes  I  am  here,  simply  to 
meet  with  the  delegate  to  participate  by  way  of  shaking  hands. 

It  affords  me  great  pleasure  to  offer  a  few  words  upon  that  second 
gi-eatest  industi-y  of  the  world — transportation.  We  all  know  that  agri- 
culture comes  first.  Transportation  depends  upon  agriculture,  as  does 
every  other  industry  of  this  country.  The  work  of  my  department  is  that 
of  development  in  the  Mississippi  Valley,  and  I  want  to  say  in  considera- 
tion of  that  work  that  there  is  no  part  of  the  United  States  today  that 
offers  such  national  advantages  and  inducements  in  the  uplift  of  our 
great  industries  as  does  Dixie  land  to  the  south.      (Applause.) 

And  so  in  Evansville  this  morning,  near  the  center  of  the  population 
of  the  United  States,  it  would  seem  psychological  that  this  conference 
was  called  at  this  point,  and  I,  too,  in  line  with  the  other  speakers,  wish 
to  congratulate  the  Chamber  of  Commerce  of  this  very  active  city  as  well 
as  your  great  pubBc  spirited  citizen,  your  very  notable  citizen,  your  Mayor 


48  THE  CENTRAL  STATES  CONFERENCE 

Bosse.  for  what  they  have  done  in  bringing  about  the  audience  that  is  here 
this  morning. 

Now,  gentlemen,  regarding  transportation,  it  was  pleasing  to  listen 
to  the  gentleman  this  morning  who  spoke  so  generously  as  to  the  stand- 
ing of  the  railroads.  Yes,  indeed,  the  railroads  of  this  country  are  in- 
terested in  the  waterways  and  all  other  mediums  of  transportation.  It 
would  be  a  very  narrow  railroad  and  a  very  narrow-minded  individual  who 
would  think  otherwise. 

I  want  to  say  in  behalf  of  the  Illinois  Central  Railroad,  gentlemen, 
that  when  the  deep  waterways  are  completed  from  the  lakes  to  the  gulf, 
I  predict  that  the  Illinois  Central  Railroad  will  be  a  four-track  line  instead 
of  a  two-track  line  from  Chicago  to  New  Orleans.    (Applause) 

Take  into  consideration  for  a  moment  what  is  the  most  important 
avenue  of  that  work.  It  is  our  public  highways.  Do  you  realize  that  up- 
wards of  ninety  per  cent,  of  all  traffic  handled  by  the  railroads  of  this 
country  is  first  handled  over  dirt  roads  or  the  highways?  Therefore  the 
railroads'  interest  in  our  highways.  We  have  two  counties  in  the  state 
of  Illinois  that  are  still  waiting  for  rail  transportation.  Compare  the  citi- 
zenship of  those  counties  with  the  other  counties  and  you  will  readily 
understand  the  importance   of   railroad   transportation. 

In  behalf  of  my  company,  I  am  very  much  appreciative  of  the  honor 
that  has  been  bestowed  upon  me,  but  just  a  word  again  with  reference 
to  agriculture,  our  first  great  industry.  The  railroads  of  today  are  very 
much  interested  in  their  sister  industry,  and  well  they  may  be.  After 
the  war  is  concluded  we  will  then  have  more  reasons  to  appreciate  the 
importance  of  our  farm  land.  This  country  today,  the  richest  in  the  world, 
is  the  most  wasteful.  My  friends,  we  haven't  yet  begun  to  study  economics. 
I  want  to  cite  just  for  the  moment — and  by  the  way,  I  don't  wish  to  take 
up  the  time  here,  Mr.  Chairman,  if  there  are  other  speakers  ready — 

Chairman  McKellar:  Go  right  ahead.  We  are  glad  to  hear  from 
you. 

Mr.  John  C.  Clair:  Thank  you  very  much.  I  will  take  up  just  a  few 
moments,  but  I  want  to  say  a  few  things  now  with  reference  to  this  coun- 
try of  ours  and  with  respect  to  agriculture.  Take  the  four  neutral  coun- 
tries of  Europe,  Norway,  Sweden,  Holland  and  Denmark.  They  represent 
the  great  dairy  business  of  the  old  world.  Now,  Denmark  is  about  the 
size  of  the  state  of  Illinois;  has  a  population  equal  to  that  of  Chicago,  two 
and  a  quarter  millions.  But  Denmark  sends  to  England  $40,000,000  worth 
of  butter,  and  $20,000,000  worth  of  bacon,  and  lays  aside  $7.50  an  acre. 
That  shows  the  value  of  economics,  gentlemen.  We  do  not  need  to  go 
across  the  seas  for  illustrations.  In  our  own  Wisconsin  last  year  the 
returns  from  dairy  products  was  $100,000,000. 

I  want  to  thank  you  for  the  courtesy  of  inviting  me  to  speak.  (Ap- 
plause) 

Chairman  McKellar:  I  am  sure  that  everyone  is  pleased  to  have  these 
words  from  the  representative  of  the  Illinois  Central  Railroad,  who  makes 
it  his  business  to  understand  conditions  of  particularly  the  territory 
served  by  the  Illinois  Central  Railroad.  He  is,  therefore,  in  a  position 
to  speak  authoritatively  on  this  subject.  If  Mr.  Van  Winkle,  President  of 
the  Indiana  Manufacturers'  Association  is  in  the  audience,  we  would  be 
glad  if  he  would  favor  us  with  a  few  remarks. 

Mr.  A.  M.  Van  Winkle:        (Indianapolis.)      Mr.  Chairman. 
Chairman  McKellar:  Mr.  Van  Winkle. 

Mr.  A,  M.  Van  Winkle:  I  am  here  as  a  representative  of  the  Indiana 
Manufacturers'  Association.  * 


THE  CENTRAL  STATES  CONFERENCE  49 

This  problem  of  transportation  is  a  question  in  which  every  manu- 
facturer, industry  and  section  of  our  country  is  deeply  interested.  With- 
out transportation  it  would  be  impossible  to  manufacture  except  in  a 
very  limited  way,  and  we  could  only  manufacture  goods  that  could  be  dis- 
tributed in  the  immediate  neighborhood,  if  it  were  not  for  our  transpor- 
tation lines.  Anything  that  interferes  with  the  development  and  with  the 
proper  operation  of  our  transportation  lines  is  a  most  serious  mistake 
and  will  work  most  serious  injury  to  the  public. 

Just  what  should  be  done  in  the  way  of  development  of  these  great 
arteries  of  commerce,  it  would  be  presumptuous  in  me  to  undertake  to 
state,  but  we  believe  that  those  men  who  are  making  a  study  of  the  ne- 
cessities of  transportation  will  work  out  this  proposition  to  the  end  that 
nothing  may  happen  to  cripple  the  lines  or  to  hinder  their  development. 

The  improvement  of  our  waterways,  the  natural  lines  of  transporta- 
tion, is  of  very  great  importance  and  we  ought  not  to  be  satisfied  until 
we  have  made  available  all  the  natural  waterways  that  are  susceptible  of 
being  improved  to  the  point  of  carrying  freight.  (Applause)  The  indus- 
tries of  the  United  States  produce  about  $24,000,000,000  worth  of  manu- 
factured articles.  That  is  a  tremendous  amount,  and  when  you  think  of 
the  tremendous  tonnage  that  must  be  moved  by  the  railroads,  or  the 
waterways,  it  is  something' to  stagger  the  imagination,  it  is  something 
most  wonderful.  The  society  of  any  nation  is  so  absolutely  dependent 
upon  the  manufacturing  industries  that  it  could  not  exist  without  them. 
The  human  family  uses  but  very  few  things  in  the  form  nature  produced 
them.  Almost  every  article  we  use,  every  tool,  every  article  of  clothing, 
and  the  greater  portion  of  our  foods  are  the  products  of  the  factory,  and 
with  the  process  of  manufacture  has  been  added  to  fhe  raw  material  a 
value  of  the  raw  material  of  from  one  hundred  to  five  thousand  per  cent. 
When  we  consider  that  the  products  of  the  factories  of  the  United  States 
amount  to  $24,000,000,000  a  year  and  will  represent  the  added  value  of 
one  thousand  per  cent,  over  the  raw  material  cost,  you  will  better  realize 
the  absolute  necessity  of  providing  ways  and  means  by  which  manufac- 
turing may  be  encouraged.  One  of  the  essential  things  to  a  manufacturing 
community  and  manufacturing  location  is  ample  facilities  to  transport 
your  raw  materials  to  your  factory  and  your  finished  products 
to  the  markets.  Without  that  your  factories  are  absolutely 
dead.  Therefore,  the  business  world,  the  manufacturing  world 
and  the  consuming  world  are  all  vitally  interested  in  the  pro- 
tection and  in  the  further  improvement  of  our  transportation  facilities; 
and  anything  that  hinders  that,  hinders  the  welfare  and  development  of 
this  country. 

I  thank  you,  gentlemen.   (Applause) 

Chairman  McKellar:  Gentlemen,  we  will  now  take  up  the  regular 
program  of  the  morning.  One  of  the  most  intricate  and  also  fascinating 
subjects  in  connection  with  railroad  commissions  is  that  of  rate  adjust- 
ment. 

Our  next  speaker  has  made  that  one  of  great  study.  He  has  appeared 
before  the  Interstate  Commerce  Commission  any  number  of  times.  He  has 
spent  days  and  weeks,  and  I  expect,  even  months  in  testifying  before  that 
body.  He  is  a  recognized  expert  all  over  the  continent  on  the  subject  of 
rate  adjustment,  and  on  the  subject  of  rate  regulation.  His  address  today 
will  be  on  the  latter  subject.  I  have  the  honor  of  introducing  to  you  Mr. 
Clifford  Thorne,  Chairman  of  the  Board  of  Railway  Commissioners  of 
Iowa,  whose  subject  will  be  "Does  Regulation  Pay?"  Mr.  Thorne.  (Ap- 
plause) 


50  THE  CENTRAL  STATES  CONFERENCE 

Does  Regulation  Pay? 

By  Mr.  ClifTord  Thorne 

Chairman  of  the  Board  of  Railway  Commissioners  of  Iowa. 

Mr.  Chairman,  I  am  not  going  to  testify  months  this  morning.  I  will 
try  to  make  it  a  little  shorter. 

I  have  been  glancing  over  your  proceedings  of  yesterday.  I  find  that 
you  have  heard  from  the  General  Solicitor  for  the  great  railway  systems, 
condemning  public  regulation  as  it  has  developed  in  this  country.  I  find 
also  that  the  president  of  the  Railway  Investors'  Association  has  joined 
in  this  condemnation.  I  find  that  a  representative  of  a  railway  supply  as- 
sociation has  joined  more  or  less  in  the  same  condemnation.  I  find  on  your 
program  this  evening  that  you  are  going  to  hear  from  the  chairman  of 
another  committee,  a  very  prominent  man  in  railroad  circles.  I  find  on 
the  platform  this  morning  a  representative  of  the  railway  employes.  I 
do  not  know  what  position  he  is  going  to  take  on  this  question.  I  find 
that  I  am  sandwiched  in  here  between  these  distinguished  gentlemen  and 
it  is  with  extreme  hesitancy  and  fear  that  I  may  not  be  able  to  present 
facts  that  you  should  consider  before  reaching  conclusions  on  one  of 
these  great  questions  that  is  being  pounded  home  on  the  human  mind  at 
the  present  moment.  I  beg  of  you  to  have  a  care,  gentlemen,  have  a  care. 
Don't  embarrass  by  any  action  that  you  may  take  a  just,  equitable  solu- 
tion of  these  problems  by  tribunals  that  will  patiently  examine  into  all 
of  the  facts  before*they  announce  their  conclusions.    (Applause) 

We  are  met  today  in  the  heart  of  industry  of  a  continent.  The  cen- 
ter of  population  has  been  within  the  bounds  of  Indiana  for  a  generation. 
The  center  of  the  food  products  of  the  nation  lies  within  three  states  to 
the  west  of  you,  Illinois,  Missouri,  and  Iowa.  The  center  of  manufactures 
lies  just  over  the  border  to  the  east  of  you,  in  the  state  of  Ohio.  Here,  in 
the  very  heart  of  the  center  of  the  industry  of  a  nation,  it  is  eminently 
fitting  that  we  should  sit  down  quietly,  calmly,  to  review  some  phases  of 
this  great  economic  question  that  is  confronting  the  people  of  the  present 
hour. 

Telephone,  telegraph,  railroads,  gas  plants,  transmission  lines,  etc., 
etc.,  are  all  subject  to  state  and  federal  regulation  of  one  kind  or  another. 
The  invention  of  steam  or  the  discovery  of  the  practical  application  of 
steam  and  electricity  to  our  needs,  to  the  efficient,  rapid,  economic  distri- 
bution and  to  the  manufacture  of  the  luxuries  and  necessities  of  life,  have 
revolutionized  human  industry  during  the  past  half  century.  It  marks  an 
epoch  in  the  industrial  history  of  the  world.  These  marvelous  changes 
have  brought  with  them  some  perplexing  problems  for  us  to  consider.  One 
of  these  is  how  can  we  efficiently,  and  sanely,  regulate  business. 

We  are  just  at  the  threshold  of  this  subject,  just  nibbling  around 
the  edges.  You  know,  the  capacity  of  American  railroads  is  ten  times 
greater  than  the  capacity  of  your  national  banks  and  yet  you  have  only 
had  railroads  with  you  within  the  lives  of  those  whom  you  and  I  see  oc- 
casionally on  the  street.  Why,  you  had  national  banks  for  several  thous- 
and years.  '  I  mean,  you  have  had  banks  for  centuries  and  centuries. 

It  is  not  strange  that  we  have  not  thoroughly  grasped  this  subject  as 
yet,  that  we  do  not  fully  appreciate  its  importance.  Do  you  realize  how 
often  you  pay  a  railroad  tax?  Come  with  me  this  morning.  I  sat  down 
here  at  the  Vendome  hotel  and  had  some  oatmeal,  coffee  and  toast. 
Freight  rates  have  been  paid  upon  the  oats  from  some  outlying  country 
district  to  the  mill.  Freight  rates  have  been  paid  on  the  oatmeal  from 
that  place  where  it  was  made  to  the  City  of  Evansville.     Freight  rates 


THE  CENTRAL  STATES  CONFERENCE  51 

have  been  paid  upon  the  dishes  upon  the  table.     Perhaps  not  on  the  table, 
I  guess  you  make  tables  here,  don't  you? 

Chairman  Murphy:     Yes,  we  do. 

Mr.  Clifford  Thome:  Freight  rates  have  probably  been  paid  on  the 
table  cloths,  or  do  you  make  them,  too? 

Chairman  Murphy:     No. 

Mr.  Clifford  Thorne:  Freight  rates  have  probably  been  paid  upon  the 
furniture,  the  chair  upon  which  I  sat,  the  pictures  on  the  wall.  Freight 
rates  have  been  paid  on  practically  everything  that  I  have  on.  Last 
night  when  I  left  Chicago  I  paid  some  money  to  the  railroads  in  order  to 
get  here,  and  finally  I  am  here,  worth  about  thirty  cents,  and  you  will  say 
twenty-three  before  I  get  through.  (Laughter.)  Freight  rates  are  paid 
upon  practically  everything  you  eat  or  wear.  You  pay  a  railroad  tax 
whenever  you  go  any  place,  whenever  you  ship  anything,  whenever  you 
buy  anything  that  comes  to  the  town  where  you  live.  You  are  paying  your 
railroad  tax  every  day,  on  practically  everything  you  eat  or  wear,  and 
whenever  you  go  any  place,  whether  you  are  rich  or  poor,  learned  or  ig- 
norant, great  or  small,  whether  you  are  running  a  ranch  or  selling  pea- 
nuts, you  must  pay  this  railroad  tax  constantly,  day  in  and  day  out.  It  is 
the  most  gigantic  industry  that  has  ever  been  developed  in  the  life  story 
of  mankind  outside  of  agriculture. 

A  few  years  ago  I  had  Mr.  Hugh  L.  Cooper  on  the  stand.  Perhaps 
you  know  of  him.  He  has  built  more  waterpower  plants  than 
any  other  three  men  who  have  ever  lived  on  the  face  of  the  earth.  He  built 
the  celebrated  Keokuk  dam,  which  is  the  largest  individual  waterpower 
plant  in  the  world.  During  the  examination  of  Mr.  Cooper  I  asked  him 
about  how  much  the  cost  averages,  the  cost  of  power  in  the  manufacture 
of  staple  products.  He  said  that  experts  had  estimated  that  as  applied 
to  the  manufacture  of  flour,  which  could  be  considered  fairly  representa- 
tive of  a  staple  product,  the  average  was  one  and  two-thirds  cents  a  hun- 
dred pounds.  At  that  time  we  were  trying  to  get  a  reduction  in  the 
rates  to  Keokuk  from  the  East.  The  citizens  were  paying  nine  cents  a 
hundred  pounds  more  than  St.  Louis  for  precisely  the  same  service  from 
New  York  City  on  first  class,  and  four  cents  on  the  sixth  class  and  corre- 
spondingly higher  on  the  intermediate  classes.  Did  you  follow  these 
figures?  In  other  words,  according  to  the  sworn  testimony  of  the  man  that 
built  the  largest  waterpower  plant  on  earth,  according  to  his  testimony, 
a  man  who  would  be  apt  to  estimate  to  its  full  the  importance  of  the  cost 
of  power  to  manufacturing,  according  to  his  estimate,  a  reduction  of  a 
few  cents  in  the  freight  rates,  of  from  four  to  nine  cents  in  the  freight 
rates  to  Keokuk  was  of  more  importance,  several  times  over,  to  the  in- 
dustrial development  of  Keokuk  than  the  building  of  this  great  dam  at 
the  cost  of  twenty-five  millions  of  dollars  at  her  very  door.  (Applause.) 
According  to  his  testimony,  if  the  citizens  of  Keokuk  had  built  that  dam 
from  the  money  in  their  own  pockets,  at  their  own  expense,  and  would 
have  said  to  the  manufacturers  of  the  country,  "Come  to  Keokuk;  we  will 
give  you  your  power  free  of  cost;"  it  is  more  important  that  she  should 
get  on  an  equality  with  St.  Louis  by  the  reduction  of  a  few  cents  in  the 
freight  rates,  and  the  manufacturer  could  better  afford  to  go  to  St.  Louis, 
or  Quincy,  than  to  Keokuk,  even  though  the  Keokuk  citizens  would  give 
the  power  free  of  cost  to  anybody  that  would  locate  there. 

Well,  the  Interstate  Commerce  Commission,  recognizing  the  justness 
of  the  claims  of  the  citizens  of  Keokuk,  Burlington  and  the  upper  river 
crossings,  put  them  on  an  equality  with  St.  Louis  on  traffic  from  the  At- 
lantic seaboard.  We  are  now  trying  to  get  the  same  equality  from  St.  Louis 
to  our  association  territory,  Michigan,  Ohio  and  Indiana,  generally  speak- 
ing.    In  that  case  was  regulation  worth  while? 


52  THE  CENTRAL  STATES  CONFERENCE 

It  was  natural  for  regulation  to  concern  itself  at  an  early  date  with 
railroads,  because  next  to  agriculture  railroads  are  our  greatest  industry 
and  railroads  are  undoubtedly  the  most  gigantic  example  of  organized 
wealth  which  the  world  has  ever  seen  up  to  the  present  day.  At  the 
present  time  we  have  had  twenty-seven  years  of  experience  with  the  reg- 
ulation of  our  railroads.  The  record  of  this  experience  is  kept  officially 
by  the  interstate  commerce  commission,  compiled  from  the  sworn  reports 
of  the  carriers  to  the  commission.  There  may  be  occasionally  very  light 
errors  in  the  figures  in  those  reports,  but  I  know  of  no  attack  upon  the 
validity  of  those  reports  of  a  substantial  character  from  any  source  what- 
ever. The  railroads  are  constantly  quoting  those  statistics.  They  are  en- 
titled to  your  unqualified  confidence,  providing  they  are  properly  inter- 
preted. 

From  this  vantage  point  of  twenty-seven  years  of  experience,  let  us 
glance  back  over  the  records  and  see  what  regulation  has  accomplished. 
Is  it  really  worth  while?  Where  has  it  succeeded  and  where  has  it  failed? 
What  are  the  defects,  if  any,  that  should  be  remedied  at  the  present  time? 

I  am  here,  gentlemen,  today — please  do  not  misunderstand  me — I 
am  here  today  not  with  a  brief  for  any  cause  or  any  case.  I  am  here  simply 
to  review  hurriedly  the  records  of  what  regulation  has  done,  to  see 
whether  the  attacks  that  are  now  being  hurled  at  public  regulations  are 
well  founded  or  not. 

I  have  a  friend  who  claims  that  he  has  analyzed  cranberries  and 
found  out  that  they  have  a  larger  percentage  of  a  certain  acid  than  the 
laws  of  a  certain  western  state  permit.  I  am  now  speaking  of  cranberries 
in  the  raw  state.  In  other  words,  the  Lord  God  Almighty  has  violated  the 
pure  food  law  of  that  western  state.  (Laughter)  I  do  not  know  whether 
the  very  capable  and  efficient  attorney  general  of  that  state  is  going 
to  prosecute  God  for  violating  the  pure  food  law.  It  might  be  quite  difficult 
to  enforce  a  prison  sentence.  We  should  be  sane  and  well-balanced  in  our 
efforts  to  regulate.    (Applause) 

Of  course,  errors  will  be  made,  and  when  they  are  made  the  quicker 
we  stop  the  opportunity  for  their  recurring  the  better  it  is  for  everybody 
concerned.  There  is  absolutely  no  disagreement  amongst  us  on  that  prop- 
osition. But  I  am  not  here  dealing  with,  details.  Mistakes  are  made  in 
every  line  of  endeavor.  I  venture  the  very  bold  and  presumptuous  as- 
sertion that  even  you  perhaps  once  or  twice  in  your  entire  life  have  made 
a  mistake. 

What  has  regulation  accomplished?  It  can  be  summarized  briefly 
under  a  few  heads.  I  fully  appreciate  what  a  tremendously  stupendous 
and  nervy  task  I  suggest,  to  attempt  to  summarize  in  a  few  minutes  the 
achievements  of  a  quarter  of  a  century  of  regulation;  but  let  us  look 
over  the  ground  and  just  view  the  high  spots  for  a  few  moments. 

First,  rebates  have  been  largely  eliminated. 

Second,  the  pass  system  has  been  so  thoroughly  placed  under  our 
control  that  its  abuse  has  been  largely  abolished. 

Third,  discriminations  between  shippers  at  the  same  point  of  origin 
have  been  practically  eliminated.  There  are  some  few  important  excep- 
tions, but  the  principal  part  of  that  task  has  been  completed. 

Fourth,  discriminations  between  localities  have  been  removed  to 
some  extent.  We  have  only  commenced  that  task,  but  substantial  steps 
have  been  completed.  Rome  was  not  built  in  a  day. 

Fifth,  so  far  as  safety  is  concerned,  the  public  and  the  employes  are 
in  better  condition  today  than  when  regulation  commenced.  But  it  is  only 
just  to  state  that  most  of  the  credit  for  that  work  should  be  given  to  the 
railway  companies  rather  than  to  the  public.   We  have  helped  some   in 


THE  CENTRAL  STATES  CONFERENCE  53 

regard  to  safety  appliances,  hours  of  labor.  We  have  not  helped  much 
as  to  the  institution  of  block  signals  or  steel  cars.  I  would  have  placed 
safety  first  had  it  not  been  that  public  regulation  has  not  made  as  large 
a  contribution  to  that  subject  as  it  has  upon  these  others  which  I  have 
just  reviewed  and  probably  not  as  much  as  it  should  have  done  in  the 
past.  I  am  not  touching  the  present  controversy  about  hours  of  labor.  I 
am  not  entering  into  that  discussion  to  any  extent.  I  have  some  other 
discussions  that  I  am  trying  to  cover. 

Sixth,  as  to  service,  we  have  not  accomplished  very  much  as  to  ser- 
vice, the  regulatory  bodies  of  the  country,  not  as  much  as  we  should 
have  accomplished.  Greater  power  should  be  given  to  the  Interstate  Com- 
merce commission  over  the  interchange  of  cars  between  carriers,  over  the 
requirements  as  to  roadbed. 

While  we  have  not  accomplished  so  much  along  that  line  there  is 
some  reason  for  it.  A  company  is  willing  to  give  you  practically  anything 
that  you  desire  that  it  makes,  providing  you  are  willing  to  pay  for  it. 
When  I  go  into  a  store  I  can  have  the  finest  cloth  in  that  store  if  I  am 
willing  to  pay  for  it.  There  is  no  conflict  between  the  man  that  sells  and 
the  man  that  buys  on  that  issue.  The  issue  comes  in  how  much  are  you 
willing  to  pay.  It  is  natural  that  the  question  of  rates  should  be  the  subject 
of  the  keenest  contests.  Railroads  are  built  to  make  money  and  they 
make  their  money  out  of  the  rates  which  they  charge.  There  is  nothing 
dishonest  about  it.  The  railroad  wants  to  have  as  much  as  it  can  get  for 
the  service  which  it  has  to  sell  providing  it  does  not  seriously  interfere 
with  general  business  activity  and  growth.  On  the  other  hand,  it  is  to 
the  interests  of  the  purchasers  of  transportation  to  secure  that  service 
at  as  reasonable  and  low  a  charge  as  is  consistent  with  the  fair  and 
reasonable  growth  and  development  of  the  railway  companies.  On  many 
matters  our  interests  are  in  common  but  upon  this  issue  of  the  rates 
which  shall  be  charged,  the  interests  of  the  public  as  a  whole  and  the  in- 
terests of  the  railroads  as  a  whole  are  diametrically  opposed.  There  is  no 
use  of  trying  to  cover  up  that  situation  with  a  lot  of  honeyed  phrases 
about  love  and  friendship  and  co-operation.  It  is  true,  it  is  the  same  old 
situation  of  buyer  and  seller  that  exists  in  every  line  of  industry  in  the 
country. 

The  man  that  sells  the  cabbages  or  the  potatoes  at  the  corner  gro- 
cery store  wants  as  much  as  he  can  get  for  what  he  sells  and  the  buyer 
wants  to  get  it  as  low  as  he  can  without  serious  injury  to  either  party. 
There  is  nothing  dishonest  or  objectionable  about  that  strife.  I  am  in  the 
same  fix.  I  have  something  to  sell  and  I  want  to  get  just  as  much  for  it 
as  I  can,  and  so  do  you.  The  issue  comes,  gentlemen,  on  how  much  is  rea- 
sonable and  fair.  Now,  let  us  consider  that  question. 

What  has  regulation  done  to  the  railroads?  I  have  before  me  tables 
covering  the  official  reports  as  to  the  total  mileage,  total  capitalization, 
total  gross  earnings,  total  expenses,  total  net  earnings,  total  capitalization, 
total  dividends,  from  the  organization  of  the  Interstate  Commerce  Com- 
mission down  to  the  present  date.  Now,  in  one  or  a  few  sentences,  what 
does  that  record  show? 

Without  attempting  to  go  through  the  details — they  are  available 
to  anyone  who  desires  to  look  at  them  after  I  am  through — we  find  that 
expenses  have  increased  enormously  during  the  past  twenty-seven  years, 
from  1888  to  1914.  But  what  about  the  other  side  of  the  story?  Earnings 
have  also  increased  enormously.  I  find  that  railroads  have  increased  their 
single  track  mileage  since  1888  almost  100  per  cent.  I  think  it  is  87  per 
cent,  to.be  accurate.  Just  think  of  this  vast  transcontinental  system,  cov- 
ering this  continent,  it  has  increased  almost  90  per  cent,  since  1888.  We 
have  had  railroads  for  eighty-six  or  seven  years.  I  find  the  capitaliza- 
tion of  American  railroads  during  these  twenty-seven  years  has  increased 
127  per  cent;  while  the  dividends  in  dollars  and  cents  have  increased  ap- 


54  THE  CENTRAL  STATES  CONFERENCE 

proximately  463  per  cent.  The  mileage  has  almost  doubled;  the  capi- 
talization has  more  than  doubled  and  the  total  dividends  in  dollars  and 
•cents  has  more  than  tripled. 

Up  to  1899  there  was  competition  in  this  country  in  the  railroad 
world  in  regard  to  the  rates  which  they  should  charge,  which  competition 
was  veiy  keen.  At  that  time  the  Interstate  Commerce  Commission  made 
its  reports,  vast  consolidations  in  the  railroad  world  were  being  made. 
You  will  find  that  in  the  report  to  Congress  in  1899  in  which  they  urged 
that  some  measure  should  be  taken  to  control  the  situation.  Rates  de- 
clined from  1888  to  1899  something  like  27  per  cent,  or  28  per  cent. 
During  that  entire  period  there  was  no  large  reduction  in  rates  ordered 
by  the  Interstate  Commerce  Commission  throughout  any  substantial  part 
of  the  nation.  Finally  the  supreme  court  said  they  had  no  power  to  re- 
duce rates.  I  challenge  any  man  in  the  room  to  cite  one  example  of  a 
large  reduction  affecting  railway  revenue  or  an  example  where  the  com- 
mission prevented  an  increase  in  rates  during  that  period.  Since  1899 
there  have  been  reductions  in  rates,  but  there  have  been  advances  and  to- 
day the  average  freight  revenue  for  every  ton  hauled  a  mile  is  a  little 
higher  than  it  was  in  18  9  9,  while  the  net  revenues  of  American  rail- 
roads last  year  were  something  like  $500,000,000  greater  than  18  99. 

In  1888  railroads  were  making  about  two  per  cent  on  their  capital 
stock  as  a  whole  and  yet  people  said  that  the  railroad  rates  were  exor- 
bitant. Because  they  thought  two  per  cent  was  too  high?  No.  You  know 
the  reason  why  that  two  per  cent  existed.  I  do  not  need  to  state  it.  Today, 
the  railroads  are  making  almost  double,  are  declaring  dividends  as  a  whole 
almost  double  what  they  did  when  regulation  commenced,  in  proportion 
to  their  capital  stock.  I  am  speaking  of  railroads  as  a  whole,  and  there 
is  not  a  man  in  this  room  that  dares  question  the  accuracy  of  one  of  those 
figures.  I  will  make  him  a  present  of  a  brand  new  suit  of  clothes  with  a 
check  for  a  thousand  dollars  inside  of  it  if  he  can  prove  an  error  in  that 
statement.  I  don't  know  whether  he  will  cash  the  check  or  not.  (Laugh- 
ter) 

I  will  be  perfectly  willing  to  set  down  with  you  and  examine  the 
official  reports  of  the  commission  and  you  will  be  persuaded  that  I  am 
absolutely  correct. 

You  remember  in  1913  there  was  a  great  advance  rate  case  on,  in- 
volving fifty  millions  of  dollars  annually.  If  you  had  a  case 
in  your  court  involving  a  hundred  thousand  dollars  or  a  mil- 
lion dollars,  you  would  think  that  it  was  some  case.  If  it  were  a 
million  dollars  it  would  be  subjected  to  much  comment  in  your  city 
and  perhaps  in  your  entire  state.  Here  was  a  case,  not  involving  a  million 
dollars,  but  fifty  millions  of  dollars;  not  fifty  millions  of  dollars  in  one 
bunch,  but  fifty  millions  of  dollars  every  year,  or  five  per  cent,  interest 
on  one  thousand  millions  of  dollars.  Never  before  or  since  the  dawn 
of  civilization  has  there  ever  been  a  contest  between  private  parties  be- 
fore a  human  tribunal  involving  such  a  large  sum  of  money  as  that,  with 
one  exception,  and  that  was  in  1910,  when  a  similar  case  was  before  the 
commission. 

I  have  before  me  an  exhibit  in  that  case.  It  was  introduced  by  the 
railroads.  I  didn't  prepare  it.  That  is  a  consolidated  statement  covering 
all  the  railroads  in  official  territory.  That  paper  shows  that  all  the  rail- 
roads as  a  whole,  big  and  little,  that  were  in  that  case,  and  there  were 
only  a  very  few  insignificant  companies  that  did  not  get  into  the  case, 
I  presume  the  mileage  represented  on  that  sheet  is  probably  ninety-eight 
per  cent,  of  the  mileage  in  official  classification  territory,  and  it  shows 
that  these  railroads  as  a  whole,  during  that  year,  the  last  year,  1913, 
were  able  to  pay  all  of  their  operating  expenses,  all  of  their  taxes,  all  of 
their  interests  on  bonds  and  debt  and  had  enough  left  over  to  equal  more 


THE  CENTRAL  STATES  CONFERENCE  55 

than  eight  per  cent  on  all  of  their  capital  stock  outstanding,   rich   and 
poor,  altogether,  in  one  sum. 

Reference  is  frequently  made  to  property  invested.  What  about  the 
return  on  the  cost  of  the  property,  we  are  told.  What  does  property  in- 
vestment mean,  gentlemen?  Property  investment  is  their  book  cost,  their 
book  value.  In  past  years  as  capitalization  was  raised,  say,  a  hundred 
million  dollars,  property  investment  was  raised  a  hundred  million  dollars. 
It  wavered  up  and  down  until  within  recent  years,  largely  within  the 
control  of  the  company,  in  order  to  make  it  correspond  to  their  capitali- 
zation. The  figure  is  very  unreliable.  For  instance,  the  property  invest- 
ment of  the  Erie  railroad  is  greater  per  mile  of  line  than  their  capitali- 
zation. Now,  is  there  anybody  here  that  thinks  that  kind  of  property  invest- 
ment, that  would  give  a  larger  value  or  cost  per  mile  of  line  than  the  capi- 
talization of  the  famous  Erie  railroad,  is  worthy  of  very  much  confidence? 
Why,  the  property  investment  of  the  Erie  is  greater  per  mile  of  line  than 
the  Pennsylvania  Railroad  system,  greater  than  that  of  the  New  York  Cen- 
tral railroad.  The  figure  is  so  unreliable  that  the  Interstate  Commerce 
Commission  in  its  annual  report  to  Congress,  in  a  recent  year,  stated  that 
no  court  or  commission,  or  accountant,  of  any  standing,  would  suggest 
that  this  book  cost  and  property  represented,  suggested  even  in  the 
slightest  degree  a  fair  statement  of  the  original  cost  or  the  present  value 
of  our  railroads. 

I  had  about  twenty  minutes  this  morning,  before  I  came  over  here, 
to  look  over  Mr.  Thom's  address  of  yesterday.  I  find  this  statement:  "At 
this  present  moment  there  is  such  a  scarcity  of  railroad  equipment  and 
other  facilities,  that  commercial  interests  have  risen  in  arms  and  the 
Interstate  Commerce  Commission  has  found  it  necessary  to  conduct  an 
exhaustive  investigation  to  find  a  way  of  supplying  with  cars  the  com- 
mercial needs  of  this  country.  Have  we  failed  to  take  note  of  the  fact 
that  in  the  last  year  there  has  been  a  smaller  railroad  construction  than 
in  any  year,  leaving  out  the  civil  war  period,  since  1848,  and  that  in  the 
last  year  there  have  been  less  than  one  thousand  miles  of  new  railroad 
constructed  in  the  United  States?  In  a  field  which  has  heretofore  been 
an  inviting  field  of  private  enterprise  we  find  that  railroad  construction 
into  new  territory  has  been  practically  arrested." 

I  have  great  admiration  for  Mr.  Thom,  a  man  of  eminent  ability,  an 
honest  man,  no  doubt.  I  have  no  desire  to  utter  a  word  of  disparagement 
of  his  ability  or  his  integrity.  But  let  us  see  if  there  are  not  some  facts 
to  be  taken  into  consideration,  when  you  consider  that  fact,  very  care- 
fully, gentlemen,  that  last  year  a  less  amount  of  construction  of  rail- 
roads in  the  west,  purchase  of  cars,  than  any  year  since  1848.  A  striking 
condition.  Whose  fault?  Was  it  inadequate  revenues?  Last  year  the 
American  railways,  according  to  the  preliminary  report  of  the  Inter- 
state Commerce  Commission,  made  net  above  all  expenses  and  taxes,  net, 
the  tidy  sum  of  $300,000,000  more  than  in  1914.  They  made  net  during 
the  last  fiscal  year,  that  of  1916,  for  which  the  report  was  compiled,  they 
made  net  more  than  $200,000,000  in  excess  of  any  other  year  in  the 
entire  history  of  American  railroading.  (Applause)  There  is  not  a  man 
in  this  room  that  dare  challenge  that.  If  so,  I  wish  he  would  stand  up. 
(Applause) 

Whose  fault  was  it  that  we  did  not  have  more  cars  purchased  and 
more  railroads  constructed?  In  all  fairness  to  the  shippers  and  the  con- 
sumers and  producers  of  America,  I  ask  Mr.  Thom  to  answer  that  ques- 
tion. 

A  few  years  ago  I  had  Mr.  Rey,  the  President  of  the  Pennsylvania 
Railroad  System,  on  the  stand  on  cross-examination.  In  pitiful  terms  he 
and  others  described  the  ruin  of  credit  of  the  American  railroads.  I  asked 
him  what  was  a  good  estimate,  really.  I  won't  attempt  to  repeat  his  testi- 
mony entirely,  but  he  knows  and  you  know  that  the  best  test  of  credit 


56  THE  CENTRAL  STATES  CONFERENCE 

is  the  rate  at  which  you  can  borrow  money;  isn't  it?  That  tells  whether 
your  credit  is  good.  If  I  can  borrow  money  at  5  %  or  6  per  cent,  and  you 
have  to  pay  8,  I  have  got  a  better  credit  than  you  have.  I  asked  Mr.  Rey 
the  rate  at  which  he  had  been  compelled  to  borrow  money  during  the  past 
year,  or  during  the  past  five  years,  and  I  challenged  him  to 
name  any  other  company  or  any  other  line  of  business  in  this  whole 
nation  that  had  been  able  to  borrow  money  at  a  cheaper  rate  than  he  and 
his  company  had  been  able  to  borrow  it,  and  he  was  unable  to  name  one 
such  company.  He  said,  "I  suppose  you  want  to  ask  if  our  credit  is  not 
about  at  the  top?"  I  said,  "Yes,  sir.  That  is  just  what  I  was  about  to  ask" 
and  he  said  "If  you  want  my  opinion  I  will  say  that  it  is."  The  Pennsyl- 
vania Railroad  handles  something  like  27  per  cent,  of  the  business  be- 
tween the  Atlantic  coast  and  the  Mississippi  river  in  the  official  territory. 
I  asked  the  bond  expert,  a  leading  witness  that  was  put  on  the  stand,  if 
the  railroads  in  the  past  were  not  able  to  borrow  money  at  as  good  a  fig- 
ure as  any  other  line  of  business,  and  he  said  they  were.  I  can  give  you 
the  exact  language,  the  page  of  the  transcript,  to  any  person  that  desires 
to  know. 

In  1914  the  commission  was  inclined  to  hold  the  1914  revenues  in- 
adequate. In  1915  the  western  advance  rate  case  came  for  hearing, 
and  in  that  case  the  evidence  showed  conclusively  that  the  railroads  were 
compelled  to  pay  more,  a  higher  rate  than  they  had  ten  or  fifteen  years 
ago.  Now,  under  the  rule  I  stated  a  while  ago,  does  that  prove  that  their 
credit  has  declined?  There  is  no  question  but  what  that  is  a  fact.  It 
must  be  concluded  that  their  credit  has  declined.  Let's  see.  Suppose  that 
the  increase  in  the  supply  of  corn  or  the  failure  of  a  certain  line  or  de- 
partment, or  something  even  world  wide  in  extent  had  so  affected  the  gen- 
eral financial  situation  throughout  the  entire  world  that  the  interest  rate 
that  company  had  to  pay  in  all  lines  of  industry  had  gradually  risen. 
There  is  another  factor  to  be  considered  than  the  rate  which  a  given  com- 
pany has  to  pay,  which  is  what  other  companies  have  to  pay.  It  is  the 
relation  between  your  rate  and  the  pure  money  rate.  We  searched  every 
financial  work  for  some  analysis  of  this  pure  money  rate  over  some  per- 
iod of  years.  We  were  unable  to  find  such  an  analysis.  We  then  start- 
ed to  investigate  the  subject  on  our  own  responsibility,  according  to  our 
own  facilities  and  means.  In  the  preparation  of  an  exhibit  on  that  one 
proposition  something  like  twelve  thousand  dollars  was  spent  by  our  asso- 
ciation and  commission.  Visits  were  made  to  New  York  and  Chicago.  An 
expert  accountant  was  put  on  the  task  and  his  exhibit  showed  the  follow- 
ing: 

Government  bonds,  as  you  know,  are  probably  the  closest  to  the  pure 
money  rate  that  we  have,  but  it  will  be  immediately  agreed  that  the  rate 
at  which  governments  are  able  to  borrow  money,  the  United  States  Gov- 
ernment especially,  and  the  European  governments,  prior  to  the  war,  was 
slightly  below  the  pure  money  rate,  because  of  certain  privileges,  deposit 
privileges  that  are  attached  to  the  bonds.  Therefore,  they  can  borrow 
money  slightly  below  the  pure  money  rate.  On  the  other  hand,  the  bonds 
of  large  cities,  Philadelphia,  New  York,  Chicago  and  so  forth,  these 
cities  are  able  to  borrow  money  at  slightly  above  the  pure  money  rate, 
because  there  is  some  element  of  hazard.  We  then  took  the  market  prices 
on  government  bonds,  of  government  bonds  of  the  four  greatest  nations 
on  earth,  of  United  States,  England,  France  and  Germany,  since  1900. 
We  found  the  trend  of  the  prices  on  those  bonds,  the  interest  rate  at  which 
they  sold,  or,  in  other  words,  it  was  called  the  yield  on  government  bond 
investments.  We  then  took  all  the  quotations  on  all  of  the  bonds  of  the 
twenty-five  largest  cities  in  the  United  States  and  found  the  trend  of  that 
yield.  Now,  one  line  represented  something  slightly  above  the  pure  money 
rate  and  the  other  line  represented  something  that  was  slightly  below 
the  pure  money  rate.  It  was  our  proposition  that  the  pure  money  rate 
lie  between  those  two  lines;   and  we  drew  a  medium  line.     The  exhibit, 


THE  CENTRAL  STATES  CONFERENCE  57 

the  accuracy  of  the  deduction,  was  not  questioned  by  either  the  carriers 
or  the  commission.  It  showed  that  the  increase  in  the  yield,  the  rate  of 
increase  in  the  yield  on  the  pure  money  rate,  the  rate  estimated,  also  the 
yield  on  government  bonds,  also  the  increase  in  the  yield  of  the  bonds  of 
the  twenty-five  largest  cities  in  the  United  States,  had  been  greater  than 
the  increase  in  the  rate  at  which  railroad  bonds  sold  during  the  same 
period.  In  other  words,  compared  to  the  general  financial  situation, 
railway  credit  as  a  whole  had  improved.  And  in  that  case  the  com- 
mission refrained  from  finding  revenues  as  inadequate,  refrained  from 
finding  railroad  credit  had  been  ruined. 

I  know  there  are  facts  on  the  other  sides  of  those  questions  that  I 
have  named.  I  don't  want  to  be  put  in  the  position  of  judging  the  matter. 
I  have  stated  to  you  some  of  the  facts  on  the  other  side  of  these  issues  be- 
cause I  know  that  you  are  hearing  plenty  of  them  on  that  side.  There  are 
always,  almost  always  two  sides  to  these  great  questions;  and  I  urge  upon 
your  minds  the  unwisdom  of  passing  resolutions  off-hand  after  you  have 
given  half-baked  consideration  to  the  purport  of  these  resolutions.  (Ap- 
plause). 

There  are  two  sides  to  these  questions,  and  when  your  resolutions 
come  up  I  hope  there  are  some  men  that  will  have  the  courage  and  abil- 
ity to  stand  up  here  and  champion  the  proposition  of  remaining  neutral 
until  these  other  bodies  that  are  appointed  to  weigh  and  consider  shall 
reach  their  conclusions.     (Applause). 

I  said  there  were  two  sides.     Mr.  Lee,  gentlemen,  has  been  very  kind 

to  me.     A  few  years  ago  I  was  trying  a  case  in  Chicago.     Mr. , 

I  won't  mention  his  name.  I  hate  to  deal  in  personalities.  Suffice  it 
to  say,  that  he  is  the  traffic  manager  for  one  of  the  greatest  railroad  sys- 
tems in  the  west.  He  introduced  an  exhibit  in  which  he  attempted  to 
show  that  the  freight  rates  on  live  stock  from  Wisconsin  to  Chicago 
were  higher  than  those  from  Iowa  to  Chicago.  I  was  trying  to  get  the 
rates  from  Iowa  to  Chicago  reduced.  That  was  not  a  very  good  show- 
ing for  me,  and  I  was  simply  a  little  country  lawyer  from  out  in  Iowa.  I 
asked  Mr.  Blank  to  give  me  a  copy  of  his  tariffs  from  which  I  could  check 
his  exhibit.  He  said  they  didn't  have  any  extra  copies  on  hand  of  that 
particular  tariff.  Mr.  Belleville,  you  have  heard  of  it  occasionally; 
haven't  you? 

Mr.  J.  M.  Belleville:     Yes  sir. 

Mr.  Clifford  Thorne:  I  asked  the  Interstate  Commerce  Commission 
if  they  would  not  send  a  copy.  They  said  they  didn't  have  any  extra 
copy  on  hand.  I  asked  if  they  wouldn't  write  for  that  copy  and  send 
it  to  me.  I  wasn't  used  to  the  situation  then,  and  they  said  they  were 
too  busy  to  do  that,  and  in  fact  Mr.  Blank  would  not  perjure  himself.  He 
was  certainly  telling  the  truth,  and  the  exhibit  was  there,  I  could  see 
with  my  own  eyes — words  to  that  effect — probably  not  quite  so  strong  as 
that.  Finally,  however,  through  a  friend  of  mine  in  Chicago,  I  got  a 
copy  of  those  tariffs  sent  to  me  in  my  home  town.  I  found  that  this  dis- 
tinguished traffic  expert  had  been  kind  enough  to  only  use  eighty-three 
towns  in  Wisconsin,  leaving  out  over  two  hundred.  He  had  used  all  of 
the  towns  in  Iowa.  He  had  selected  the  rates  from  that  part  of  the 
state  which  proved  his  point,  up  in  the  northern  part  of  Wisconsin,  where 
those  eighty-three  towns  were  located,  up  where  they  wouldn't  recognize 
a  cow  if  they  saw  one  coming  down  the  path.  (Laughter.)  Up  there 
they  don't  raise  hogs  to  ship.  They  only  average  a  quarter  of  a  hog  to 
a  quarter  of  a  section,  and  they  don't  ship  him;  they  eat  him.  I  found 
that  when  you  used  all  of  the  towns  in  the  territory  from  which  live 
stock  is  shipped  that  you  proved  directly  the  opposite  from  what  that 
gentleman  testified  to.  Later  his  counsel,  in  oral  argument,  apologized  for 
that.  He  said  the  reason  was  the  clerk  had  misunderstood  the  instruc- 
tions that  had  been  given  to  him.     (Laughter).     I  am  very  sorry  for  that 


58  THE  CENTRAL  STATES  CONFERENCE 

clerk.  I  don't  question  it  at  all.  He  also  testified  to  the  fact  that  Min- 
nesota rates  on  live  stock  were  lower  than  Iowa-Chicago  rates,  Minnesota 
rates  to  St.  Paul.  I  checked  that  up.  I  found  that  he  only  used  ten  per 
cent,  of  the  towns  in  Minnesota,  leaving  out  ninety  per  cent.  The  same 
gentleman  under  oath  testified,  before  this  young,  poor  country  lawyer  as 
the  opposing  counsel,  that  the  freight  rates  on  cattle  in  Illinois  had  been 
reduced  in  1906  to  conform  to  eastern  rates  on  cattle. 

Now,  Thorne  was  trying  to  get  those  eastern  rates  on  cattle  applied 
from  Iowa  to  Chicago.  I  asked  him  how  he  knew  the  Illinois  rates  on  cat- 
tle were  reduced  in  1906.  "Why,"  he  said,  "I  took  part  in  the  proceed- 
ings, Mr.  Thorne."  A  gentleman  under  oath,  of  wide  experience  and  un- 
questioned character.  Later  I  secured  the  certified  statement  from  the  Illi- 
nois Railroad  and  Warehouse  Commission  to  the  effect  that  there  had  not 
been  a  reduction  in  cattle  rates  in  Illinois  for  a  quarter  of  a  century, 
and  the  Interstate  Commerce  Commission  specifically  sustained  my  posi- 
tion on  that  proposition  in  their  inquiry. 

Now,  that  poor  clerk,  I  am  sorry  for  him  for  misunderstanding  those 
instructions.  The  only  thing  that  I  am  sorry  for  from  my  standpoint  is 
that  all  these  mistakes  had  been  in  one  line,  one  way,  one  direction.  I 
only  wish  he  could  have  made  a  few  mistakes  my  way  in  the  compilation 
of  those  exhibits. 

I  say  there  are  two  sides  to  this  question.  I  have  in  front  of  me  that 
exhibit  again.  Gentlemen,  that  shows  that  for  the  five  years  ending  with 
1912,  the  average  rate  on  all  outstanding  capital  stock,  net  corporate 
income  on  the  capital  stock  is  7.8  5.  For  the  preceding  five  years  it  was 
8.80  and  for  1913  it  was  8.07.  Now,  that  would  indicate  that  the  aver- 
age rate  during  the  last  five  years  was  less  than  during  the  preceding 
five  years.  Next:  It  indicates  that  the  average  rate  in  1913  was  less 
than  those  first  five  years.  That  indicates  a  downward  tendency,  doesn't 
It?     Anybody  can  see  that.     It  was  so  testified  to  by  the  companies. 

I  don't  know  whether  your  friend  caught  those  figures  or  not.  Those 
first  five  years  were  from  1903  to  1907.  The  next  five  years  were 
from  1908  to  1912,  inclusive.  In  other  words,  the  man  that  compiled  fig- 
ures left  out  1913  from  either  side.  You  know,  when  I  saw  that  I  fell 
into  meditativeness:  Now  why,  did  that  account  start  with  1903  and  stop 
with  1912?  Why  didn't  he  use  the  next  two  periods  commencing  with 
1904  and  ending  with  1913?  My  curiosity  was  aroused.  That  was  all. 
You  know  the  old  saving,  it  is  an  old  chestnut,  about  how  figures  never 
lie — but  liars  figure. 

Now,  this  chart  1  recompiled  and  I  took  his  same  figures  without 
the  alteration  of  a  numeral.  I  commenced  with  1904  to  1908  inclusive 
and  1909  to  1913  inclusive,  and  it  showed  precisely  the  opposite. 
It  showed  a  higher  rate  in  the  last  five  years  than  during  the  preceding  five 
years;  and  it  showed  a  higher  rate  in  1913  than  in  either  five  year  period. 

Again,  I  challenge  any  man  to  question  the  accuracy  of  that  state- 
ment. The  sheet  is  here.  Anybody  can  see  it  and  you  can  check  it  up. 
You  will  find  that  I  am  telling  you  the  truth  and  nobody  dare  to  deny  it. 

Folks,  I  said  there  are  two  sides  to  these  questions.  Mr.  Trumbull 
will  present  to  you  the  other  side.  I  do  not  know  that  he  can  present 
it  ably  and  forcibly.  The  only  little  I  want  left  lingering  in  your  mind 
is  this:  Perhaps  there  is  another  side  to  that.  Perhaps  that  I  ought 
to  consider  when  Mr.  Trumbull  gets  through,  before  I  make  up  my  own 
mind. 

Today  there  are  three  great  movements  in  the  railroad  wprld. 

The  first  relates  to  the  making  of  a  uniform  classification  of 
freight  throughout  the  United  States.  The  railroads  of  the  country  have 
united  and  they  have  divided  the  country  into  three  great  districts,  i.  e., 


THE  CENTRAL  STATES  CONFERENCE  59 

the  Official  Classification  territory.  Southern  Classification  territory  and 
Western  Classification  territory.  This  results  in  confusion  in  the  discrim- 
ination of  packages,  in  rules  and  regulations  and  in  ratings,  a  confusion 
with  which  you  as  shippers  are  thoroughly  conversant.  The  railroads 
appreciate  that  fact  and  so  does  the  Interstate  Commerce  Commission 
and  so  do  the  state  commissions.  The  changing  of  the  little  letter  "1"  op- 
posite an  article  in  one  of  those  classifications  covering  eight  thousand 
items  automatically  increases,  as  you  know,  the  rates  that  must  be  paid 
by  twenty  to  thirty  millions  of  people  on  that  article,  increases  the  rates 
immediately  when  it  becomes  effective,  by  one  hundred  per  cent,  eight 
thousand  items  in  that  classification. 

Nine  men  have  been  appointed  to  reframe  the  classifications  of 
the  country.  I  claim  that  that  is  a  task  of  the  size  and  magnitude  that 
it  is  a  governmental  function,  and  the  men  who  perform  that  task 
should  not  be  in  the  employ  of  either  the  railroads  or  of  the  shippers. 
The  National  Association  of  Railway  Commissioners  for  a  dozen  years 
has  unanimously  recommended  that  the  Interstate  Commerce  Commission 
should  undertake  that  task.  (Applause).  I  don't  care  whether  Mr. 
Fyfe,  or  these  other  men  that  are  at  present  working  on  it  would  continue 
on  the  committee  or  not.  I  have  confidence  in  their  ability  and  their  in- 
tegrity enough  to  know  that  when  they  are  working  for  the  railroads 
they  are  going  to  try  to  boost  the  rates,  and  when  they  are  working  for 
the  people,  for  the  government  instead  of  the  shippers  or  the  railroads, 
they  might  be  more  fair  in  their  conclusions,  providing  their  job  was 
good  enough,  the  salary  was  large  enough,  and  the  probable  tenure  of 
office  was  safe  enough  that  they  would  not  continually  be  working  with 
their  hands  behind  their  backs,  waiting  for  a  job  from  the  railroads. 
(Applause). 

The  second  great  movement  now  on  in  the  railroad  world  relates 
to  the  appraisal,  the  valuation  of  our  railroads.  The  magnitude  of  some 
of  the  issues  in  that  case  is  almost  too  great  for  the  brain  to  grasp  them. 
The  celebrated  Gould  printing  press  incident  only  involved  $23,000,000. 
Just  consider  one  item  at  issue  in  this  national  appraisal. 

The  Massachusettes  commission  held  that  a  railroad  was  entitled 
to  but  two  per  cent,  for  contingencies.  The  Michigan  commission  held 
that  a  railroad  is  entitled  to  about  ten  per  cent,  for  contingencies.  There 
is  a  variation  of  about  eight  per  cent,  in  that  one  item.  The  railroads 
claim  the  value  of  American  railroads  is  from  $15,000,000,000  to  $20,- 
000,000,000.  A  variation  of  82  per  cent,  on  $1.5,000  000,000  amounts  to 
over  one  thousand  million  dollars,  involved  in  that  one  little  issue  which  is 
to  be  determined  by  seven  men  living  over  here  in  Washington. 

A  few  months  ago  a  case  was  closed  out  here  in  Los  Angeles,  in- 
volving the  appraisal  of  an  electric  plant  that  was  purchased  by  the  city 
of  Los  Angeles.  The  experts  in  the  employ  of  the  company  under  oath, 
on  the  witness  stand,  testified  to  a  value  of  that  electric  plant  amounting  to 
$22,000,000,  while  the  experts  in  the  employ  of  the  city  of  Los  Angeles, 
experts  gathered  from  all  portions  of  the  country,  men  of  eminent  ability, 
testified  to  a  value  of  that  property  of  less  than  $4,000,000. 

In  other  words,  gentlemen,  in  that  one  case  there  is  a  variation  of 
more  than  500  per  cent,  in  the  valuation  of  the  same  property,  for  the 
same  purpose,  before  the  same  tribunal,  at  the  same  time. 

Now,  contemplate,  if  you  can,  the.  possibilities  of  this  national  ap- 
praisal of  American  railroads. 

But  how  are  you  looking  after  your  interests?  The  Interstate  Com- 
merce Commission  is  to  decide  the  issue.  They  have  organized  a  com- 
mittee of  nine  men  of  the  most  distinguished  lawyers  in  our  country. 
They  have  several  hundred  experts  working  under  their  direction  con- 
stantly.    Whenever  a  little  group  of  employes  of  the  commission  goes  out 


60  THE  CENTRAL  STATES  CONFERENCE 

to  inspect  the  condition  of  so  many  cars  or  so  many  rails  or  tlie  roadbed, 
in  order  to  determine  the  facts  that  shall  be  reported  to  the  commission, 
a  railroad  employe  goes  along  with  that  little  group  of  men.  You  have 
constantly,  on  one  side  a  representative  of  their  interests;  and  who 
is  representing  your  side  of  the  controversy? 

The  commission  is  to  decide  the  issue.  There  is  not  a  judge  in  the 
land  but  what  hates  to  decide  a  case  upon  an  ex  parte  showing.  If  you 
have  a  case  in  court  involving  $100,000  and  the  other  side  is  represented 
constantly,  will  you  sit  calmly  at  home  doing  nothing?  No;  if  you  have 
got  one  grain  of  sense,  if  you  are  not  bothered  with  a  lot  of  asinine  stu- 
pidity, you  will  follow  every  stage,  every  step  in  that  contest,  every  stage 
in  the  proceedings. 

To  show  you  how  it  works  practically:  You  have  confidence  in 
the  Supreme  Court  of  the  United  States,  haven't  you?  And  yet  if  there 
is  a  case  before  the  Supreme  Court  of  the  United  States,  a  corporation 
has  violated  the  law,  that  corporation  has  its  representative  there  cham- 
pioning its  case,  and  the  government  has  its  representative  on  the  other 
side,  and  the  Supreme  Court  decides  the  issue.  Are  you  looking  after  your 
interests? 

Here  is  a  table  of  the  unit  values  of  the  different  articles  going  into 
the  making  of  railroads:  The  price  of  rails  and  ties  and  cars  and  en- 
gines. It  is  placed  before  the  representatives  of  the  railroads  to  check 
those  unit  values.  Those  railroad  representatives  will  be  apt  to  push  up 
the  values  when  they  are  too  low.  Is  there  anybody  on  the  other  side 
to  push  them  down? 

The  point  is  that  both  sides  should  have  an  advocate.  The  Nation- 
al Association  of  Railway  Commissioners  have  employed  one  attorney  and 
one  stenographer  to  represent  a  hundred  million  people  on  the  other 
side  of  the  case,  in  a  case  involving  fifteen  to  twenty  billion  dollars'  worth 
of  property.  It  seems  to  me  that  it  is  up  to  the  shippers  to  consolidate 
their  interests  in  some  efficient  manner  to  see  that  they  are  properly 
guarded. 

Now,  there  is  just  one  other  great  railroad  movement  to  which  I  de- 
sire to  call  your  attention,  one  other  great  movement  in  the  railroad 
world,  and  then  I  am  through  with  that  proposition. 

The  Newlands  committee,  a  joint  committee  of  both  House  and 
Senate,  has  undertaken  an  appraisal  of  our  present  methods  of  regula- 
tion. They  are  going  to  go  over  the  records  to  see  where  regulation  has 
fallen  short,  to  see  where  it  can  be  improved.  Various  suggestions  have 
been  made  by  both  parties.  Where  is  the  shipper  directly  concerned,  in 
this  investigation  before  the  Newlands  committee,  in  which  they  are  go- 
ing to  appraise  our  present  methods  of  regulation?  The  railroads  are 
again  well  represented.  I  am  most  delighted  with  this  concrete  demon- 
stration of  that  fact  by  the  conference  being  held  in  this  city  yester- 
day and  today.  They  are  represented.  Here  is  Mr.  Thom,  Mr.  Trumbull, 
Mr.  Muir,  the  representative  of  the  Railway  Investors,  going  about  the 
nation,  bolstering  up  public  sentiment  on  their  side  of  the  issue. 

Mr.  Thom  has  spent  months  analyzing  arguments,  getting  ready  for 
the  hearing.  They  have  employed  experts,  gatherd  data,  and  prepared. 
I  do  not  criticise  that  for  one  instant.  It  is  eminently  proper  and  fitting 
that  they  should  do  so.  If  I  were  in  their  shoes  I  would  do  the  same 
thing  provided  I  had  enough  brains. 

The  point  that  I  am  making  is,  how  are  you  represented?  Have 
you  prepared  data,  an  analysis  of  the  situation,  with  your  experts,  etc., 
and  ready  for  this  great  investigation? 

I  wish  I  could  discuss  some  of  those  issues  that  are  going  to  be  thresh- 
ed out  before  the  committee,  but  I  must  not  do  so.  I  have  imposed  upon 
your  patience  too  long.  Just  one  or  two  sentences  upon  one  proposition 
they  propose,  which  is  to  eliminate  state  regulation. 


THE  CENTRAL  STATES  CONFERENCE  61 

There  are  some  matters  it  is  well  for  the  national  government  to 
do;  there  are  some  matters  it  is  well  for  the  states  to  do.  Some  others 
are  better  for  the  county  to  attend  to  and  some  others  for  the  city  to 
attend  to,  and  some  things  ought  to  be  really  left  to  the  man  himself.  It 
might  be  well  to  have  a  world  federation  to  compel  peace  amongst  na- 
tions. But  I  would  not  like  to  leave  it  to  that  world  federation  to  de- 
cide how  the  sewers  should  be  laid  in  my  home  town,  what  kind  of  pants 
I  ought  to  wear  or  when  I  ought  to  get  up  in  the  morning.  There  are 
some  things  that  the  state  can  do  better  than  the  nation,  and  some  things, 
as  I  said,  that  the  county  can  do  better  than  the  state. 

What  is  the  distinguishing  characteristic  of  this  American  system  of 
government?  It  is  not  a  great  centralized  power,  because  there  have  been 
greater  nations  in  the  world  so  far  as  size  is  concerned.  What  is  the  dis- 
tinguishing characteristic,  the  great  contribution  that  America  has  made 
in  the  science  of  government?  It  is  not  separate  states,  small  enough 
so  that  you  can  have  home  rule.  There  have  been  small  countries  where 
democracy  has  existed,  Greece  and  Switzerland  over  here.  What  is  the 
distinguishing  feature?  It  is  the  great  combination  of  a  great  body  of 
states  into  one  nation,  combining  efficient  home  rule  with  a  great  cen- 
tralized power.  And  anybody  that  attacks  that  federal  system  of  gov- 
ernment is  attacking  the  fundamental  characteristic  that  distinguishes 
the  United  States  government  from  all  others  that  have  ever  existed. 
(Applause). 

Mr.  Thom  has  told  the  committee  that  he  does  not  desire,  and  the 
railroads  are  not  asking,  for  an  advance  in  revenue.  That  is  not  their 
purpose.  Let  us  see.  There  have  been  just  eleven  cases  before  the  Inter- 
state Commerce  Commission  where  the  state  rates  have  conflicted  with  the 
interstate  rates,  the  interstate  rates  being  those  established  by  the  com- 
mission and  levied  by  the  railroads.  One  or  two  of  these  have  been  re- 
opened. In  not  one  instance  has  the  Interstate  Commerce  Commission 
adopted  the  state  rate  as  the  standard.  Every  one  of  those  cases  result- 
ed in  an  increase  in  rates.  I  ask  you,  isn't  the  purpose  very,  very  plain? 
I  am  heartily  in  accord  with  their  proposition  that  where  discriminations 
exist  between  state  and  interstate  rates  of  a  substantial  character, 
enough  to  constitute  a  burden  on  interstate  commerce,  there  ought  to  be 
some  method  of  ironing  out  the  discrimination.  The  public  will  never 
consent  to  any  other  program. 

Now,  the  National  Association  of  Railway  Commissioners  has  sug- 
gested this  idea,  i.  e.,  when  there  is  a  dispute  between  two  parties,  is  it 
well  to  leave  it  to  one  of  the  disputants  to  determine  the  matter  at  issue? 
Is  that  a  good  move?  You  don't  follow  it  generally.  Our  suggestion 
is  that  when  a  state  rate  and  a  rate  established  by  a  state  authority, 
either  state  legislature  or  state  commission,  conflicts  with  the  interstate 
rate  that  it  should  be  left  to  a  third  party,  a  court,  to  determine  which  is 
reasonable. 

It  has  been  suggested  that  a  ourt  cannot  establish  or  make  reason- 
able rates.  Yes,  that  is  true — for  the  future.  But  the  courts  have  held 
that  while  they  have  no  power  to  establish  reasonable  rates  for  the  fu- 
ture, they  do  have  power  to  pass  upon  the  reasonableness  of  rates  already 
established. 

There  are  so  many  of  these  problems  of  such  gigantic  size  and  im- 
portance that  I  would  like  to  talk  more  about  them;  but  I  hope  I  have 
driven  home  one  point,  and  one  point  only,  which  is  that  there  are  two 
sides  to  these  questions,  and  how  are  you  being  represented?  How  are 
you  taking  care  of  your  interests? 

It  was  a  striking  scene  the  other  day  when  a  railroad  conductor 
went  back  to  Washington,  D.  C,  to  call  upon  the  president  and  the  pres- 
ident adjourned  the  cabinet  meeting  to  hear  him  talk.  Could  he  in  his 
individual  capacity  produce  that  result?  No.  Because  he  represented  a 
large  and  efficiently  organized  body  of  men.     He  told  Congress  that  by  a 


62  THE  CENTRAL  STATES  CONFERENCE 

certain  date  they  had  to  pass  such  a  law.  Congress  did  so.  Could  he  in 
his, individual  capacity  have  brought  about  that  result? 

You  have  scores  of  railroad  organizations  of  all  kinds,  scores  of 
railroad  companies,  several  hundred,  I  think.  But  they  have  one  feder- 
ation of  all  the  companies,  the  American  Railway  Association,  and  when 
it  speaks  it  speaks  with  power.  There  are  many  labor  unions  and  organ- 
izations of  laboring  men,  but  there  is  a  federation  known  as  the  Ameri- 
can Federation  of  Labor,  which  sneaks  with  power.  You  have  the  Ameri- 
can National  Live  Stock  Association  composed  of  stockmen  in  some 
twenty-two  western  states,  the  National  Industrial  Traffic  League,  com- 
posed of  shippers  and  manufacturers  in  many  large  cities.  You  have 
the  American  National  Manufacturers  Association,  National  Council  of 
Grain  Dealers,  organizations  of  wool  growers,  organizations  of  chambers 
of  commerce,  live  stock  exchanges,  retail  hardware  men,  retail  clothiers, 
and  etc.,  etc.  But  it  is  my  thought  that  there  should  be  a  federation 
of  all. 

That  little  incident  in  Washington,  D.  C, — I  don't  want  to  misquote 
anybody — it  was  a  striking  scene.  The  Literary  Digest  is  my  authority 
for  the  following:  Mr.  Garretson  said,  in  times  of  great  industrial  read- 
justment, "men  go  back  to  primal  instincts.  They  go  back  to  the  day 
of  the  caveman,  the  caveman  who  with  his  half-gnawed  bone,  snarled  at 
the  other  caveman  who  wanted  to  take  his  bone  away."  Then  he  added, 
the  railroad  world,  "When  we  hit  a  'cow',"  he  said,  "specks  in  the  sky 
that  were  vultures  could  soon  be  seen  over  the  carcass.  Now,  the  pub- 
lic is  the  carcass.  And  we  are  all,  perhaps,  the  vultures,"  Mr.  Garretson 
said  to  the  committee.  He  said  the  brotherhoods  were  protecting  the 
pockets  of  their  men,  that  the  railway  companies  were  protecting  the 
pockets  of  their  stockholders,  and  the  public  was  without  a  protector,  and 
would  pay  the  bill.     Is  that  a  correct  quotation,  or  not,  Mr.  Lee? 

Mr.  W.  G.  Lee:  I  think  it  is;  but  I  do  not  agree  with  it  by  any 
means.      (Applause). 

Mr.  Thorne:  Do  you  agree  with  this  proposition,  Mr.  Lee,  that  it 
would  be  well  if  the  shippers  were  as  efficiently  organized  as  the  rail- 
roads? 

Mr.  W.  G.  Lee:  Yes,  sir;  absolutely;  they  should  be.  It  is  their 
fault  if  they  are  not. 

Mr.  Thorne:  There  is  a  lesson  here  that  is  of  stupendous  import- 
ance to  the  shipping  public.  It  needs  no  elaboration.  I  only  offer  the 
suggestion  in  passing  through  your  midst. 

You  have  an  amalgamation  of  all  the  railways  in  the  American 
Railway  Association.  You  have  a  consolidation  of  labor  that  is  composed 
of  the  American  Federation  of  Labor.  It  would  seem  well  to  me  that 
here  in  these  gatherings  of  representatives  of  various  cities,  here  in  the 
great  Mississippi  Valley,  here  in  the  heart  of  industry  of  our  country, 
that  you  should  begin  to  lay  the  foundation  of  a  consolidation  of  your  or- 
ganizations, a  sort  of  an  amalgamation  that  might  be  termed  perhaps  the 
National  Federation  of  Shippers,  and  then  when  you  speak  you  will  speak 
with  the  weight  and  the  power  that  is  your  due  in  the  councils  of  the 
nation. 

I  thank  you.     (Applause). 

A  vote  of  thanks  was  tendered  to  Mr.  Thorne  for  his  address,  after 
which  Charles  C.  Gilbert,  secretary  of  the  Tennessee  Manufacturers' 
Association,  asked  for  permission  to  introduce  a  resolution  regarding 
the  location  of  the  proposed  Government  nitrate  plant.  Chairman  Mc- 
Kellar  advised  Mr.  Gilbert  to  prepare  his  resolution  and  submit  it  to  the 
committee. 

The  resolution  as  offered  later  was  as  follows: 

Whereas,  The  congress  of  the  United  States  had  made  an  appropria- 
tion for  the  establishment  of  a  nitrate  plant  for  the  manufacture  of  ni- 


THE  CENTRAL  STATES  CONFERENCE  63 

trate,  and  whereas  this  plant  must  be  located  on  an  inland  stream  afford- 
ing sufficient  water  power  development,  as  well  as  being  in  close  prox- 
imity to  the  necessary  natural  raw  material  for  the  manufacture  of  ni- 
trate, and  whereas.  Mussel  Shoals,  Alabama,  on  the  Tennessee  river,  is 
considered  by  government  engineers  and  many  other  eminent  authorities 
as  a  suitable  location: 

Be  it  Resolved,  by  the  Central  States  Conference  on  Rail  and  Water 
Transportation,  that  the  president  of  the  United  States  be  urged  to  locate 
the  government  plant  at  Mussel  Shoals. 

Be  it  further  resolved.  That  the  secretary  of  this  conference  be  in- 
structed to  forward  a  copy  of  this  resolution  to  President  Wilson. 

(Action  on  Mr.  Gilbert's  resolution  was  not  taken  by  the  committee 
for  the  reason  that  no  opportunity  was  afforded  for  a  general  discussion 
of  the  proposal  in  the  Conference.  It  was  reported,  however,  that  each 
member  of  the  Resolutions  Committee  signified  hearty  approval  of  the 
idea. — Editor.) 

Chairman  McKellar  next  recognized  Mr.  J.  R.  A.  Hobson,  of  Evans- 
•  ville. 

Mr.  Chairman,  I  am  requested  by  Mr,  Murphy  to  read  a  letter  re- 
ceived from  Mr.  William  A.  Rawles,  Dean  of  the  Faculty  of  the  College 
of  Liberal  Arts,  Indiana  University.  They  have  in  this  university  a  cor- 
r  spondence  school  on  transportation  in  which  are  enrolled  many  hun- 
dred students  from  this  state. 

"December  14,  1916. 
Mr.  H.  C.  Murphy,  Evansville  Chamber  of  Commerce,  Evansville,  Indiana. 
My  Dear  Mr.  Murphy: 

"I  have  received  your  letter  of  December  11th  inviting  me  to  attend 
the  Conference  on  Rail  and  Water  Transportation  to  be  held  at  Evansville 
this  week  and  to  participate  in  the  discussion.  I  regret  exceedingly  that 
it  will  be  impossible  for  me  to  do  so. 

"I  am  much  interested  in  the  question  of  transportation.  I  think 
you  have  done  a  great  thing  in  bringing  together  on  the  same  platform 
the  representatives  of  all  elements  of  this  difficult  problem.  I  sincerely 
trust  that  it  will  be  profitable  to  the  whole  middle  west.  Very  truly  yours, 
Wm.  A.  Rawles." 

After  a  few  announcements  by  the  chairman  the  conference  ad- 
journed until  2  p.  m. 


FRIDAY  AFTERNOON  SESSION. 
December  15,  1916. 


Chairman  Murphy  presided,  and  called  the  meeting  to  order  at  2:30 
p.  m. 

A  flashlight  picture  of  the  Conference  was  taken. 

CHAIRMAN  MURPHY:  Gentlemen  of  the  Conference,  and  guests: 
We  now  proceed  to  a  part  of  the  program  that  should  afford  the  most 
intense  interest  to  our  delegates,  to  our  guests  and  to  our  whole  people. 
Perhaps  the  chief  point  that  will  be  developed  in  this  conference  is  the 
point  of  view  of  the  men  who  run  the  railroads.  I  do  not  mean  the  opera- 
tors. I  refer  to  the  workmen.  We  think  we  have  secured  as  the  man  to 
elaborate  the  point  of  view  of  these  people  the  ablest  representative  of 
organized  labor  in  the  United  States. 

I  have  the  pleasure  of  introducing  Mr.  W.  G.  Lee,  the  president  of 
the  Brotherhood  of  Railway  Trainmen,  who  will  talk  to  you  upon  the 
"Hours  and  Working  Conditions  of  Railway  Employes."  I  have  the  honor 
to  present  Mr.  W.  G.  Lee.  (Applause) 


64  THE  CENTRAL  STATES  CONFERENCE 

Hours  and  Working  Conditions  of  Railway 
Employes. 

By  W.  G.  Lee,  President  of  the  Brotherhood  of  Railway  Trainmen 

Mr.  Chairman,  ladies  and  gentlemen:  I  feel  highly  honored  in  being 
asked  to  come  here  to  talk  to  you  on  any  subject  and  more  particularly 
on  the  subject  of  labor.  Perhaps  it  might  not  be  out  of  place  for  me  to 
say  in  the  beginning  that  I  am  not  an  orator,  as  you  will  undoubtedly 
find  out  before  I  get  through,  I  am  just  an  ordinary  railway  man,  with- 
out even  the  advantage  of  having  a  high  school  education.  I  was  running 
a  train  as  conductor  before  I  was  twenty-one  years  of  age  for  the  Sante 
Fe  Railroad,  out  in  the  western  country.  Whatever  experience  I  have 
gained  has  been  through  rubbing  shoulders  with  men  like  those  on  this 
platform  and  in  this  audience.  I  do  not  know  but  that  after  twenty-two 
years'  experience  as  an  officer  of  a  labor  organizatisn  I  cannot  truth- 
fully say  that,  regardless  of  education,  if  the  man  or  men  do  not  meet  the 
occasion  in  man  fashion  he  is  a  failure  in  whatever  business  he  may  under- 
take or  attempt  to  follow.  I  have  often  regretted,  of  course,  on  being  com- 
pelled to  take  the  platform  with  men  like  our  most  distinguished  ex-Pres- 
ident Roosevelt  and  ex-President  Taft  and  others  that  I  had  not  giren 
more  of  my  younger  days  to  schooling;  but  even  then  I  have  tried  in  guid- 
ing the  organization  of  142,000  men  to  go  along  the  lines  of  decent 
methods,  the  square  deal  and  making  good  our  word  in  all  instances  as 
agreed  to  with  our  employer. 

The  Brotherhood  of  Locomotive  Engineers  was  the  first  to  blaze  the 
way  through  an  organized  territory.  A  few  men  running  engines  got  to- 
gether away  back  in  1866,  which  resulted  in  the  organization  of  the 
Brotherhood  of  Locomotive  Engineers.  Ten  years  later  what  is  now  known 
as  the  Order  of  Railway  Conductors  came  into  existence,  a  non-striking 
and  non-protective  organization  until  1893.  In  1873  the  Brotherhood  of 
Locomotive  Firemen's  organization  came  into  existence,  and  ten  years 
later,  September  23,  1883,  the  Brotherhood  of  Railroad  Brakemen,  later 
changed  in  name  to  the  Brotherhood  of  Railroad  Trainmen,  was 
organized  and  at  this  time,  as  I  stated,  has  a  membership  of  something 
over  142,000  men. 

These  four  organizations  have  beneficiary  insurance  attached,  paying 
to  their  membership  upon  death  or  permanent  disability  payments  on 
policies  ranging  from  five  hundred  to  three  thousand  dollars,  accord- 
ing to  age  and  certain  other  conditions.  All  of  the  members  are  com- 
pelled to  carry  one  of  the  policies  if  between  the  age  of  18  and  4  5,  and  if 
their  physical  condition  at  the  time  of  admission  to  the  organization  is 
such  as  to  permit  them  to  pass  the  necessary  examination.  It  will  suffice 
to  say  to  you  that  to  date,  or  as  of  December  1st,  the  organization  I  have 
the  honor  to  represent  has  paid  out  in  excess  of  $34,000,000  to  the 
widow,  the  orphan,  and  the  maimed,  collected  dollar  by  dollar  from  men 
receiving  a  salary  of  from  two  dollars  to  four  dollars  per  day.  And 
even  with  that  expenditure,  doing  so  much  good  that  I  could  not  tell  yoii 
about  it  except  to  point  out  perhaps  in  your  city  instances  where  the 
widow  and  children  have  been  able  to  keep  from  asking  for  public  char- 
ity, which  otherwise  they  would  have  had  to  have  done  on  the  death 
of  the  husband  and  father.  All  over  this  country  are  living  monuments 
of  the  good  accomplished  by  these  organizations  in  that  respect. 

Now,  these  organizations  are  not  only  insurance  organizations,  but 
they  are  labor  organizations  doing  a  beneficiary  insurance  business.  The 
the  amount  paid  out  by  each  of  the  other  organizations,  running  into  the 


THE  CENTRAL  STATES  CONFERENCE  66 

many,  many  millions  of  dollars,  and  still  back  of  that  these  oi'ganiza- 
tions  have  accumulated  a  treasury  fund  amounting  in  my  own  organiza- 
tion to  something  in  excess  of  $4,22  5,000  to  protect  against  outstand- 
ing policies  and  against  accidents  of  any  kind  that  might  overtake  the 
organization.  In  making  those  statements,  I  do  it  for  the  purpose  of  first 
trying  to  get  you  to  understand  that  we  believe  we  are  handling  our  or- 
ganizations along  business  lines. 

We  have  been  criticized  often  by  some  other  trade  unions  because 
we  have  not  followed  in  their  path,  because  we  have  deemed  it  advisable 
to  conduct  our  own  organizations  in  our  own  way;  and  perhaps  it  is  not 
out  of  place  for  me  to  again  say  that  I  have  often  criticised  labor  organi- 
zations for  not  making  good  their  word,  their  contract  or  their  agree- 
ment, and  I  have  often  stated,  and  I  repeat,  that  any  organization  of  labor 
that  expects  to  live,  that  expects  to  continue,  must  make  good  its  contract 
with  its  employer,  no  matter  what  discipline  it  must  administer  to  its 
membership  to  do  so.   (Applause) 

The  employer  will  deal  more  kindly  with  those  representing  labor  if 
they  are  guaranteed  or  assured  that  labor  will  make  good  its  word,  and 
the  employer  can  proceed  to  contract,  no  matter  what  his  business  may 
be,  if  he  can  be  assured  that  his  business  will  not  be  interrupted  with  a 
strike  Avithout  notice  or  without  due  process  of  law.  For  these  organiza- 
tions have  their  own  code  of  laws,  and  for  the  railroad  organizations  I 
insist  they  live  up  to  them.  So  today  these  organizations  have  working 
agreements  with  practically  every  railroad  in  the  United  States  and  Can- 
ada, not  a  closed  shop  agreement. 

We  have  never  yet  asked  for  a  closed  shop  agreement.  We  hope  the 
time  will  never  come  when  we  must  do  so,  although  we  have  no  criticism 
of  an  organization  or  of  organizations  who  believe  it  to  their  advantage 
to  insist  upon  the  closed  shop  condition.  With  us  we  have  tried  to  make 
our  organizations  so  good  that  the  men  of  our  class  will  affiliate  with 
them  without  being  compelled  to  ask  for  the  discharge  of  a  man  or  the 
displacement  of  a  man  because  he  does  not  belong  to  organized  labor. 
How  well  we  have  succeeded,  you  can  form  your  own  conclusion,  when  I 
say  to  you  that  of  our  class  fully  eighty-five  per  cent,  of  those  engaged 
in  the  transportation  departments,  as  we  know  them,  are  organized.  There 
are  men  on  every  railroad  that  work  throughout  their  natural  lifetime 
without  becoming  affiliated  with  the  organization  representing  the  cause. 
That  is  their  business.  We  naturally  feel  that  they  should  become  affil- 
iated with  the  organization,  but  if  they  don't  do  so,  we  have  never 
yet  asked  for  the  discharge  of  one  of  those  men.  We  have  said  to  the 
railroad  companies  that  those  men  must  receive  the  same  consideration, 
the  same  rates  of  pay,  and  the  same  working  rules  that  our  membership 
received.  And  so  we  think  we  have  fairly  well  succeeded  along  these 
lines. 

With  this  brief  outline  of  our  policy  you  will  perhaps  be  interested 
to  know  something  of  this  so-called  Adamson  law,  eight-hour  law.  I  do  not 
believe  there  has  ever  been  a  law  enacted  that  has  been  talked  about 
and  so  maliciously  talked  about  to  any  greater  extent  than  that  law, 
known  as  the  eight-hour  law. 

These  four  organizations  and  the  railroad  companies  in  the  United 
States  have  what  is  known  as  the  Eastern,  Western  and  Southern  As- 
sociations. The  Eastern  Association  assumes  to  deal  with  the  territory 
east  of  the  Mississippi  River  and  north  of  the  Ohio  River.  The  Southern 
Association  for  the  territory  south  of  the  Ohio  River  and  east  of  the 
Mississippi  River;  while  the  Western  Association  deals  with  the  railroads 
west  of  the  Mississippi  River,  or  west  of  the  main  line  of  the  Illinois  Cen- 
tral    Railroad.       In     these     three     different     territories,     these  organi- 


66  THE  CENTRAL  STATES  CONFERENCE 

zations  have  moved  at  different  times  for  better  working  con- 
ditions, better  rates  of  pay,  and  all  that,  but  never  before 
did  they  attempt  to  move  in  conjunction  with  each  other. 
But  last  January,  a  proposition  was  filed  v/ith  the  general  managers  of 
all  of  the  railroads  in  the  United  States  asking  for  two  things:  i.  e.,  the 
eight-hour  basic  day;  time  and  a  half  for  overtime. 

That  notice  was  presented  to  these  railroads  last  January  and  later 
a  conference  was  held  with  the  National  Conference  Committee.  Perhaps 
I  should  explain  to  you  just  what  that  means.  There  is  a  committee  known 
as  the  National  Conference  Committee,  of  which  Mr.  Elisha  Lee  is  chair- 
man. It  consists  of  eighteen  members,  vice-presidents  or  general  mana- 
gers of  railroads,  authorized  to  speak  for  approximately  all  of  the  princi- 
pal railroads  in  the  United  States.  So  when  our  request  was  forwarded  to 
the  general  managers  of  the  different  railroads  it  naturally  found  its  way 
to  this  conference  committee,  and  when  we  later  met  the  conference 
committee  to  discuss  those  propositions,  all  of  which  is  made  a  matter 
of  record,  is  published,  a  stenographic  report  kept  at  that  time,  they  re- 
fused our  proposition,  as  we  expected  they  would.  Because,  right  here  I 
might  say  to  you,  that  we  have  not  found  it  the  custom  of  railroad  com- 
panies to  hand  out  anything,  nor  do  I  believe  it  is  of  employes  generally, 
unless  they  can  see  something  coming  back  to  fully  repay  them  or  more. 

So  when  this  request  was  declined  we  submitted  to  our  membership 
in  circular  form,  and  asked  them  to  read  and  at  the  bottom  subscribe 
their  names,  and  to  what?  "I  have  read  the  foregoing  statement  and  here- 
by cast  my  vote  for  or  against  the  strike,  unless  a  satisfactory  settle- 
ment of  the  questions  at  issue  can  otherwise  be  made.  Full  authority  is 
hereby  given  to  our  general  committeemen  and  officers  in  charge  to  speak 
for  and  represent  us."  Power  of  attorney,  in  fact,  ^yas  given  in  that  bal- 
lot. So,  when  the  ballot  was  canvassed  on  the  first  day  of  August,  all  of 
this  time  having  elapsed  from  January  1st  to  August  1st,  we  found  that 
approximately  ninety-six  per  cent,  of  the  nearly  four  hundred  thousand 
men  of  our  several  callings  had  voted  in  favor  of  leaving  the  service 
unless  a  satisfactory  settlement  could  be  made. 

Now,  what  did  a  satisfactory  settlement  mean?  Any  settlement  that 
the  committeemen  and  four  grand  lodge  officers  in  charge  should  feel 
like  accepting. 

Well,  when  we  met  the  conference  committee  on  August  1st  and  out- 
lined to  them  the  evidence  they  still  refused  to  grant  our  request,  and 
asked  us,  "Will  you  join  with  us  in  appealing  to  the  Board  of  Mediation 
and  Conciliation  to  handle  this  matter?"  We  said  to  them,  "No.  Under  the 
federal  act  you  can  appeal  or  apply  to  that  board  just  as  we  could  do  it." 
Then  they  said  to  us,  "Will  you  leave  this  entire  matter  to  arbitration?" 
"No,  no;  not  as  you  suggested  it."  "Why?"  "We  will  tell  you  why.  When 
we  filed  our  proposition  it  was  for  practically  every  railroad  in  the  United 
States.  When  this  conference  committee  of  yours  answered  us  it  excluded 
from  the  list  "all  railways  which  you  were  willing  to  have  speak  for  them- 
selves. Something  like  seventy-five  railroads;  you  excluded  from  that  list 
all  of  the  colored  brakemen,  firemen,  switchmen  and  others  all  through 
the  south  who  are  doing  exactly  the  same  that  the  brakemen  or  the  fire- 
men or  the  hostlers  or  switchmen  of  the  north  are  doing.  You  promised 
to  speak  for  these  men.  You  told  us  they  could  not  join  our  organizations 
and,  therefore,  you  promised  to  speak  for  them,  although  we  always  held 
that  we  were  legislating  for  the  class,  for  the  job,  and  not  for  the  man, 
that  it  makes  no  difference  to  us  whether  he  was  white  or  black,  whether 
he  was  Catholic  or  Protestant,  or  what  not,  we  believe  that  if  he  were 
doing  the  same  work  our  men  were  doing,  that  he  was  entitled  to  the 
same  consideration.  And  if  your  proposition  is  to  lead  to  arbitrating  this 
question,  excluding  those  seventy-five  railroads,  excluding  those  classes, 
then  we  will  not  arbitrate  the  question."  (Applause) 


THE  CENTRAL  STATES  CONFERENCE  67 

And  let  me  say  to  you  right  here,  our  four  organizations  are  pledged 
to  arbitration.  Convention  after  convention  has  passed  resolutions  pledg- 
ing us  to  arbitration;  but,  gentlemen,  that  does  not  mean  arbitration  un- 
der any  and  all  conditions.  It  means  arbitration  with  honor.  There  is  not 
one  of  you  in  this  house  that  will  agree  to  arbitrate  a  controversy  that 
you  might  have  with  someone  and  let  the  someone  solely  dictate  the  terms 
of  arbitration,  not  one  of  you.     (Applause.) 

The  railroad  companies  proposed  that  we  arbitrate  the  eight-hour 
day,  the  question  of  time  and  a  half;  for  what?  For  the  railroads  that 
they  wanted  it  arbitrated  for,  excluding  all  the  others,  for  the  employes 
that  they  wanted  it  arbitrated  for,  excluding  all  the  others;  and  we  would 
not  agree  to  it;  we  never  will  agree  to  it,  while  we  have  organizations. 
But  we  are  pledged  to  arbitration.  That  means  both  parties  to  the  con- 
troversy can  dictate,  that  they  shall  have  equal  rights  as  to  what  the 
terms  of  arbitration  shall  be. 

Let  me  ask  you  if  our  government  in  your  opinion  would  arbitrate 
with  Mexico  today  and  let  Mexico  dictate  the  terms  of  arbitration?  No. 
We  would  probably  find  in  that  agreement  to  arbitrate  the  question  of 
who  in  the  future  should  own  Texas,  because  Texas  for  many  years  be- 
longed to  Mexico.  Do  you  think  our  government  would  bow  humbly  to 
that  and  agree?  Not  quite. 

There  is  not  one  of  you  that  would  arbitrate  the  question  of  whether 
or  not  you  shall  be  permitted  to  live  in  the  home  that  you  bought  and 
paid  for.  And  why  do  I  say  that?  Because,  gentlemen,  on  6  5,700  miles  of 
railroad  in  the  United  States  and  Canada  today,  and  for  several  years 
back,  we  have,  and  have  had,  the  eight-hour  basic  day  in  through  freight 
service.  Through  freight  service  is  the  class  of  service  that  handles  our 
large  percentage  of  tonnage,  the  largest  percentage  of  tonnage  of  all 
business  in  the  country,  as  every  one  of  you  shippers  know. 

What  does  the  eight-hour  basic  day  mean?  Our  schedules  today  are 
all  written  in  this  language,  speaking  now  of  the  Eastern  territory  only: 
"100  miles  or  less,  10  hours  or  less,  shall  constitute  a  day."  That  is  the 
wording  in  every  one  of  the  schedules  in  freight  service.  Now,  get  that 
again:  "100  miles  or  less,  10  hours  or  less,"  shall  constitute  a  day.  Let 
us  digest  that  just  for  a  moment. 

If  a  freight  crew  is  called — and  by  the  way,  all  of  these  freight  men 
are  piece-workers — all  through  freight  Avorkers  are  piece-workers.  They 
are  only  paid  when  they  are  called  and  sent  out,  and  they  may  not  be 
'Called  for  a  day  or  a  week.  If  not,  they  will  not  receive  a  penny.  They 
are  paid  by  the  mile  and  paid  when  they  are  called  and  make  a  trip,  but 
they  are  guaranteed  a  minimum  day's  pay  when  they  are  called  to  go  out. 

Now,  let's  see  what  that  means,  100  miles  or  less,  10  hours  or  less. 
That  means  this,  that  if  a  crew  is  called  to  leave  Evansville  today  in 
through  freight  service  and  makes  the  division  of  one  hundred  miles  in 
three  hours  or  four  hours  or  five  hours,  any  member  of  that  crew  has 
given  to  the  company  ten  hours'  service  equivalent,  because  he  has  gone 
100  miles.  Now,  100  miles,  or  ten  hours,  in  this  territory  is  one  and  the 
same  in  every  schedule  in  effect,  recognized  by  the  railroad  companies  for 
years,  recognized  by  us.  So  that  if  in  making  that  one  hundred  miles  that 
crew  is  the  full  ten  hours  in  making  it,  it  gets  exactly  the  same  amount  of 
money  as  though  they  had  been  able  to  go  over  that  division  in  three 
hours  or  four  hours.  With  the  tonnage  of  today,  I  think  the  records  that 
will  later  be  filed  by  this  special  committee  of  Mr.  Goethals,  will  prove 
conclusively  that  the  men  are  today  working  practically  on  an  hourly 
basis  rather  than  a  mileage  basis,  because  the  tonnage  on  these  trains 
is  such  as  to  keep  them,  generally  speaking,  less  than  ten  miles  per  hour. 

Now,  if  that  is  understood  by  you,  then  in  this  eastern  territory  in 
freight  service  we  have  an  eight-hour  day  now,  and  have  had  it  since  1913, 


68  THE  CENTRAL  STATES  CONFERENCE 

wheu  it  was  changed  from  a  monthly  basis  or  a  trip  basis  to  the  mileage 
basis,  just  as  we  had  it  in  the  west  for  ten,  fifteen  or  twenty  years.  There- 
fore, don't  lose  sight  of  this.  Our  request  was  the  basic  hours  a  day  which 
meant  100  miles  or  less,  eight  hours  or  less,  shall  constitute  a  day. 

You  have  probably  seen  in  the  press  repeatedly  criticism  of  these 
organizations  because  we  ask  for  an  eight-hour  day.  You  have  been  told 
by  some  that  the  Adamson  law  was  not  an  eight-hour  day  law,  while 
others  have  told  you  that  it  was.  I  don't  know  what  it  is.  If  I  did  I  would 
have  the  supreme  court  beaten,  because  it  is  up  to  the  supreme  court  to 
tell  us  by  the  twenty-second  of  January.  I  don't  know  what  it  is.  But  re- 
gardless of  that  fact,  before  I  get  through  I  want  to  tell  you  who  is  re- 
sponsible for  that  law,  I  want  to  tell  you  who  took  the  president  by  the 
neck,  I  want  to  tell  you  who  took  Congress  by  the  neck  and  made 
them  say  "Uncle!"  as  these  papers  would  have  you  believe  our  organiza- 
tions were  the  ones  who  did  it,  the  Big  Four.  I  want  you  to  judge  who 
did  it  and  I  want  you  to  judge  from  what  I  say  before  I  get  through. 

We  know  that  the  companies  could  have  established  the  eight-hour 
basic  day,  which  would  have  meant  that  if  the  division  were  one  hun- 
dred miles  long  overtime  would  start  after  eight  hours,  regardless  of 
how  many  hours  it  would  take  that  creT\'  to  make  that  run  over  that  hun- 
dred miles  in  through  freight  service.  If  they  made  that  run  over  that 
hundred  miles  in  through  freight  service  in  four  hours  they  would  get 
paid  for  it.  But  what  do  they  get  paid?  A  brakeman's  rate  today  in  this 
entire  Eastern  territory  is  $2.67  for  ten  hours,  $2.67  for  one  hundred 
miles.  Get  those  figures  properly.  I  want  to  show  you  later  some  of  these 
millionaire  brakemen  that  have  been  reported  through  the  press  and  that 
you  have  been  told  about.  Please  get  out  your  pencil  and  paper  and  at  the 
rate  of  $2.67  for  ten  hours,  $2.67  for  one  hundred  miles,  how  long  it  would 
take  and  how  many  miles  he  would  have  to  cover  for  that  brakeman 
to  get  to  be  a  millionaire.  Figure  out  how  long  it  would  take  that  brake- 
man  in  through  freight  service  east  of  the  Mississippi  to  earn  that 
amount  of  money,  with  that  brakeman  earning  $2.67  for  a  hundred  miles 
or  ten  hours.  If  he  is  over  ten  hours,  overtime  commences  at  the  expiration 
of  ten  hours  and  he  gets  what?  He  gets  one-tenth  of  $2.67  per  hour  for 
every  hour  overtime. 

Let  us  suppose  that  the  run  is  12  5  miles  long.  Then  what  did  our 
proposition  mean?  It  meant  inserting  in  our  schedules  where  "ten  hours" 
appear,  "eight  hours."  It  meant  changing  in  our  schedules  where  "ten 
miles  per  hour"  to  "twelve  and  a  half  miles  per  hour."  That  is  all  it 
meant;  that  is  all  it  meant,  and  nothing  more,  in  freight  service,  the  eas- 
iest thing  in  the  world,  and  every  operating  officer  knows  it,  so  far  as 
working  it  out  in  our  schedules  is  concerned.  But  they  immediately  com- 
menced to  tell  you  that  it  would  cost  $100,000,000  to  do  this.  One  con- 
tract paid  for  by  these  railroad  companies — and  if  the  gentleman  wants 
to  dispute  it  I  will  undertake  to  furnish  the  proof — one  contract  made 
to  one  advertising  company  alone  was  for  three-quarters  of  a  million  dol- 
lars, to  tell  you  and  others  that  it  would  cost  $100,000,000  to  grant  this 
request  of  ours.  They  paid  for  that  information  and  sent  it  out  over  the 
country,  believing  this  question  would  go  to  arbitration  and  that  you  and 
everybody  else  who  had  read  it  would  be  prejudiced  against  us.  It  was 
packing  the  jury  pure  and  simple  and  that  is  all  it  was. 

What  do  you  do  today  when  you  call  a  juror  before  you?  If  he  has 
been  reading  the  papers  in  regard  to  this  murder  or  crime  for  which 
somebody  is  about  to  be  tried,  you  immediately  assume  that  he  has  formed 
an  opinion  and  he  is  cast  aside.  But  when  you  spend  millions  of  dollars 
to  prejudice  the  public  against  a  certain  condition  as  these  railroad  com- 
panies did  do  through  their  publicity  departments,  and  then  expect  us  to 
go  to  arbitration  with  a  prejudiced  jury,  have  we  received  a  square  deal? 
Not  quite. 


THE  CENTRAL  STATES  CONFERENCE  69 

And  so  I  am  glad  of  the  opportunity  to  not  only  come  here,  but  to 
go  to  the  far  corners  of  the  earth  to  tell  this  story  of  what  happened.  I 
am  only  sorry  that  on  this  platform  does  not  sit  one  or  a  dozen  of  the 
gentlemen  on  the  other  side  who  went  through  the  negotiations  from 
start  to  finish.  I  do  not  think  that  one  of  them  would  contradict  what  I 
say  in  regard  to  these  matters  insofar  as  the  negotiations  are  concerned, 
because  we  saw  them  exactly  alike. 

We  were  the  ones,  of  course,  who  held  up  the  President  and  Con- 
gress. We  were  the  ones  that  held  the  stop-watch  on  these  people.  I  was 
rather  sorry  to  hear  my  good  friend  who  spoke  last  before  luncheon,  speak 
as  if  he  were  under  the  impression  that  we  were  all-powerful  and  that 
we  told  Congress  to  do  so  and  so  by  a  certain  time  and  they  did  it. 

Let  me  tell  you  the  story  a  little  differently  from  that.  When  they 
asked  us  to  arbitrate  or  leave  the  question  to  mediation  and  we  declined, 
the  railroad  companies,  through  their  conference  committee,  appealed  to 
the  government  at  W^ashington  for  the  good  offices  of  the  mediation  and 
conciliation  board,  and  the  next  day,  and  for  five  days  following.  Judge 
Chambers,  Judge  Knapp  and  Mr.  Hanger,  who  constitute  that  board, 
worked  with  us  and  with  the  railroad  committee,  trying  to  get  us  to- 
gether. It  was  like  the  eleven  jurors  as  against  the  one.  The  railroad 
companies  would  not  concede  a  thing  nor  make  any  proposition  what- 
ever and  we  would  not  concede  any  one  of  the  two  propositions  we  had. 
Therefore,  the  Board  of  Mediation  and  Conciliation  were  absolutely  at  sea, 
and  so  at  the  expiration  of  the  fifth  day  they  came  before  us,  and  re- 
member when  I  said  "us,"  I  mean  640  committeemen  from  your  railroads 
in  this  city,  the  ones  that  enter  this  city,  and  every  other  railroad  of  note 
in  the  United  States  that  were  with  us  in  Washington  and  in  New  York. 
The  Board  of  Mediation  and  Conciliation  came  before  us  and  said,  "Gen- 
tlemen, we  are  sorry  to  advise  you  that  there  is  no  possibility  of  a  set- 
tlement. The  railroad  companies  will  make  no  concession  and  you  gen- 
tlemen will  make  no  concession,  and  so  we  have  completed  our  services. 
But,  before  leaving  you,  let  us  give  you  this  notice."  And  we  were  handed 
a  communication  of  which  this  is  an  exact  copy,  and  the  railroad  com- 
panies through  their  committee  were  handed  the  same  communication, 
so  we  were  told  by  the  Board.  This  is  dated  August  13th,  1916.  "I  have 
learned  with  surprise  and  keen  disappointment  that  an  agreement  con- 
cerning the  settlement  of  the  matters  in  controversy  between  the  railroads 
and  their  employes  has  proven  impossible.  A  general  strike  on  the  rail- 
ways would  at  any  time  have  a  most  far-reaching  and  injurious  effect 
upon  the  country.  At  this  time  the  effect  might  be  disastrous.  I  feel  that 
I  have  a  right,  therefore,  to  request,  and  I  do  hereby  request,  as  the  head 
of  the  nation,  that  before  any  final  decision  is  arrived  at,  that  I  may  have 
a  personal  conference  with  you  here.  I  shall  hold  myself  ready  to  meet 
you  at  any  time  you  may  be  able  to  reach  Washington.  Sincerely  yours, 
Woodrow  Wilson." 

Remember,  that  was  the  13th  day  of  August,  and  we  had  been  ne- 
gotiating from  the  first  day  of  January,  and  you  hadn't  heard  much,  if 
anything,  about  this  except  through  the  paid  editorials  and  advertise- 
ments that  had  gone  out.  You  had  been  told,  of  course,  what  we  were 
asking  for  and  what  it  w-ould  cost.  What  could  we,  as  citizens,  do  but 
answer  the  request  of  the  chief  executive  of  this  njation  with  our  pres- 
ence? So  that  night  a  sub-committee  of  thirty  of  our  chairmen  and  four 
chief  executives  went  to  Washington  from  New  York.  On  the  same  train 
some  of  tfhe  conference  committee,  who  had  received  the  same  notice,  went 
to  Washington. 

The  next  day  at  three  o'clock,  we  met  the  President.  He  asked  us 
many  questions  and  we  told  him  our  story,  just  what  we  were  asking 
for,  just  why  we  knew  it  could  be  done,  and  we  said  to  him,  "Mr.  Presi- 
dent, we  know  that  this  can  be  done,  and  we  know  because  we  have  paid 


70  THE  CENTRAL  STATES  CONFERENCE 

statisticians  of  high  standing  to  tell  us  what  it  means,  that  it  would  cost 
less  than  fifty  millions  of  dollars  to  give  us  our  request  in  its  entirety. 
We  know  that  the  question  of  overtime  is  curtailable.  We  don't  know  to 
what  extent,  but  we  do  know  that  it  is  largely  a  question  of  operation, 
and  that  these  trains  can  be  gotten  over  the  road  on  a  twelve  and  a  half 
mile  speed  basis,  because  in  this  Southern  territory,  on  6  5,700  miles  of 
these  roads  they  have  been  operating  on  a  twelve  and  one-half  mile  speed 
basis,  as  it  is  in  our  agreement,  for  years.  And  of  all  of  those  roads,  only 
three  are  in  the  hands  of  the  receivers,  and  the  three  total  a  mileage  of 
less  than  1,000  miles,  while  under  the  ten-hour  day,  or  ten  miles  an  hour 
schedule,  we  find  roads  like  the  Rock  Island  of  8,000  miles,  the  Missouri 
Pacific,  the  Iron  Mountain,  the  Frisco  and  many  big  systems  in  the 
hands  of  receivers.  They  have  what  is  called  the  ten-hour  day.  They  are 
on  the  ten-mile  an  hour  basis.  Therefore,  that  should  be  proof  enough  to 
anyone  that  these  railroads  can  operate  on  an  eight-hour  basic  day  if  they 
want  to  do  so  and  without  putting  them  in  the  hands  of  the  receivers,  be- 
cause here  is  the  proof." 

The  President  heard  our  statement.  He  called  the  conference  com- 
mittee before  him  and  for  three  days,  or  about  that,  the  negotiations  con- 
tinued. At  the  expiration  of  that  time  the  President  handed  to  us  a  state- 
ment and  told  us  that  the  same  kind  of  a  statement  had  been  handed  to 
the  National  Conference  Committee  that  same  day.  The  National  Confer- 
ence Committee  have  corroborated  that  statement  verbally  to  me  and 
others  since  that  time. 

When  we  outlined  our  proposition  to  the  President  he  said  to  us  at 
the  expiration  of  the  third  day,  "Gentlemen,  I  agree  with  your  request 
for  the  eight-hour  basic  day.  I  think  it  is  right.  And  I  am  forming  that 
conclusion,  not  hurriedly,  but  because  this  government  of  ours  has  for 
many,  many  years  recognized  the  eight-hour  work  day  for  all  of  its  em- 
ployes, because  thirty  of  the  states  of  this  union  recognize  the  eight-hour 
work  day  for  their  employes,  because,  in  addition  to  that,  a  million  and  a 
half  and  over  workmen  are  enjoying  the  eight-hour  day  under  contracts 
peacefully  negotiated  with  their  employers,  and  I  think  it  is  too  late  for 
us  now  to  say  that  the  eight-hour  day  can't  go  into  effect  or  is  a  question 
of  arbitration." 

We  had  told  the  President  why  we  would  not  arbitrate  the  eight- 
hour  day.  We  said  to  him,  "Mr.  President,  they  made  no  proposition  to  us 
to  arbitrate  for  all  of  the  railroads,  but  they  excluded  railroads  where 
they  thought  they  could  whip  us.  They  arbitrated,  or  were  willing  to  arbi- 
trate on  railroads,  where  it  was  a  question  as  to  who  held  the  whiphand. 
That  is  the  position.  Now,  if  we  are  going  to  arbitrate,  we  are  going  to  ar- 
bitrate for  all  of  these  men  and  roads  or  none,  and  we  had  no  opportunity 
to  answer  the  question  of  arbitration  in  that  way." 

He  said  further,  "Your  request  for  time  and  a  half  and  the  company 
request  for  some  matters  that  they  had  suggested  should  be  investigated, 
and  so  I  would  only  support  you  in  your  request  for  the  eight-hour  basic 
day,  leaving  all  other  questions  to  negotiations,  to  be  settled  later." 

At  that  time  the  President  handed  to  us  this  little  typewritten  mem- 
orandum and  the  same  was  handed  to  the  railroad  companies.  He  handled 
that  meeting  very  satisfactorily.  He  would  call  the  conference  committee 
and  then  send  them  back  and  then  he  would  call  the  employes  and  then 
send  us  back  and  for  some  days  and  nights  he  was  pretty  busy.  His 
proposition  was  this: 

"First.  Concession  of  the  eight-hour  day  . 

"Postponement  of  the  other  demands  as  to  payment  for  overtime  and 
the  counter-suggestion  of  the  railway  managers  until  experience  actually 
discloses  the  consequence  of  the  eight-hour  day. 


THE  CENTRAL  STATES  CONFERENCE  71 

"In  the  meantime  the  constitution,  by  authority  of  Congress,  of  a 
commission  or  body  of  men,  appointed  by  the  President,  to  investigate 
and  report  upon  its  consequences  without  recommendation. 

"Then  such  action  upon  the  acts  as  to  the  parties  to  the  present  con- 
troversy may  seem  best." 

That  is  the  proposition  that  was  handed  to  us  and  handed  to  the 
other  side.  We  took  that  to  our  committee  room  and  for  twenty-four  hours 
our  six  hundred  men  discussed  it  and  then  they  came  to  a  secret  yea 
and  nay  vote,  every  man  writing  his  vote  and  signing  his  name  to  it,  so 
that  every  man  could  vote  as  he  pleased.  The  result  was  that  one  or- 
ganization voted  not  to  accept  the  President's  suggestion.  Three  organi- 
zations, by  majority  vote,  voted  to  accept  the  President's  proposition.  I 
mention  that  merely  to  show  that  our  men  were  not  a  unit  in  accepting 
the  President's  proposition  and  suggestion.  Yv'hy?  Because  they  realized 
they  waived  more  than  fifty  per  cent,  of  their  demands.  They  waived  en- 
tirely the  question  of  time  and  a  half  for  overtime. 

They  wanted  shorter  working  days.  They  were  being  tied  up  ove^- 
the  hours  every  day  over  the  country  in  various  places  and  they  wanted 
to  stop  that  if  they  could,  and  they  knew,  and  I  knov.^  and  you,  if  you  are 
familiar  with  it,  know,  that  so  long  as  it  does  not  cost  the  employer  a 
penny  more  to  pay  for  the  hour  after  the  expiration  of  the  day  than  it 
did  to  pay  for  the  first  hour  or  the  second  hour,  there  is  not  much  of  an 
incentive  to  release  the  man  at  the  expiration  of  ten  hours  or  eight  hours, 
or  any  other  number  of  hours.  Therefore,  our  asking  for  time  and  a  half 
for  overtime  was  for  the  purpose  of  penalizing  the  company,  and  we  knew 
that  if  we  did  that  that  much  of  this  overtime  would  be  discontinued. 
And  as  a  practical  man,  and  as  far  as  that  is  concerned,  every  practical 
man,  I  dont'  care  whether  he  is  a  general  manager  or  president  of  a  rail- 
road, knows  that  that  would  have  the  effect  of  stopping  all  possible  over- 
time, if  they  had  to  pay  time  and  a  half  or  double  time  for  it. 

Now,  we  were  criticised,  of  course,  for  that,  but  our  men  voted  to 
accept  the  proposition  coming  from  the  President,  because  it  was  the  chief 
executive  of  this  nation  who  was  making  that  request.  We  said  to  the 
men  from  the  platform  when  they  were  discussing  it,  "Gentlemen,  let  us 
suppose  for  a  moment  you  refuse  to  accept  the  President's  suggestion  after 
his  three  days'  investigation  of  it,  what  do  you  think  public  opinion  will  be 
when  the  President  tells  the  public  that  we  refused  his  suggestions  and 
the  railroad  companies  accepted  it,  etc.?  You  can't  afford  to  refuse  his 
proposition,  even  though  it  is  not  what  we  think  you  should  have."  They 
voted  to  accept  it,  as  you  have  been  told. 

Then,  what  happened?  For  elev^  days  we  remained  in  Washing- 
ton as  the  guests  of  the  President,  waiting  for  the  conference  committee 
or  the  representatives  of  the  railroads  to  accept  or  reject  the  President's 
proposition.  To  this  minute,  so  far  as  I  know,  they  have  never  accepted 
it  or  rejected  it.  But  the  President's  own  statement  to  us,  at  the  expira- 
tion of  the  ninth  day,  was  "Gentlemen,  I  think  they  will  give  an  answer 
tonight  or  tomorrow.     They  led  me  to  believe  that  when  I  last  met  them." 

Finally,  after  we  had  been  there  eleven  days,  our  men  becoming  ex- 
cited because  they  had  waived  so  much  of  their  original  proposition,  we 
commenced  to  see  that  we  could  not  hold  those  men,  nor  the  thousands 
and  thousands  at  home  much  longer.  So  we  said  to  President  Wilson. 
■"We  realize  we  are  here  as  your  guests.  You  invited  us  here.  We  would 
ask  that  you  kindly  release  us.  We  think  that  we  have  waited  long  enough. 
We  would  ask  that  you  kindly  release  us  and  send  these  men  home.  We 
think  these  gentlemen  down  at  the  Willard  Hotel  will  change  front  in  a 
few  days." 

Whether  the  President  kn«w  just  what  that  meant  or  not,  I  don't 
know,  but  he  said  then,  as  nearly  as  I  can  remember  it  now,  "Let  us  hold 


72  THE  CENTRAL  STATES  CONFERENCE 

that  in  abeyance   for  twenty-four  hours,   because   I   feel   confident   I  am 
going  to  get  their  answer,  perhaps  this  afternoon." 

That  was  Friday  noon.  We  waited  until  Saturday  afternoon,  and  no 
news.  We  waited  until  Sunday  morning  and  no  news.  In  the  meantime, 
reporters  had  told  us  that  the  President  had  gone  from  the  White  House 
to  the  capitol  and  that  he  was  then  consulting  with  Mr.  Adamson,  Mr. 
Newlands  and  others  in  reference  to  a  law.  It  is  as  true  as  there  is  a  God 
above  us  that  not  one  of  the  chief  executives  or  men  in  these  organizations 
had  up  to  that  moment  ever  thought  or  heard  of  an  eight-hour  law  being 
enacted.  We  never  thought  of  it.  What  the  President  had  in  mind, 
what  he  did  in  consulting  with  these  people  who  later  prepared  that  law 
was  not  told  to  us  and  we  had  nothing  to  say  until  the  bill  was  introduced 
in  the  House,  which  is  now  known  as  the  Adamson  bill.     (Applause.) 

We  sent  our  men  with  the  order  in  their  pocket  to  leave  the  service, 
as  you  know,  a  week  later,  September  4th.  Within  twenty-four  hours, 
of  course,  the  news  was  out  that  the  strike  was  going  to  go  on  at  a  cer- 
tain time. 

The  President  sent  for  us  and  said,  "Now,  gentlemen,  is  it  true  that 
you  have  set  an  hour  when  this  strike  will  go  on?"  We  said,  "The  men 
have  the  orders  in  their  pockets.  They  are  on  their  way  home  now.  It 
Avill  take  some  of  them  six  days  to  get  home.  Some  of  them  live  in  Seattle 
and  Portland,  Oregon,  and  other  places  far  to  the  west."  Well,  he  said, 
"Gentlemen,  this  strike  must  not  go  on.  It  cannot  go  on.  Here  are  a 
hundred  million  people  that  would  be  discommoded.  It  must  not  go  on." 
"Well,"  we  said,  "Mr.  President,  don't  you  think  we  have  been  rather 
patient  in  waiting  here  eleven  days  for  the  other  side  to  accept  or  tell  you 
what  they  are  going  to  do?"  He  gave  no  answer  to  that,  but  he  said,  "If 
we  could  get  some  law — I  don't  know  whether  we  can.  Congress  is  just 
about  to  adjourn.  If  we  could  get  some  law."  We  said,  "Mr.  President, 
we  understand  that  there  is  a  law  partially  prepared,  etc."  That  was  a 
compulsory  arbitration  law,  so  called.  That  is  the  law  that  I  feared.  That 
is  the  law  that  I  looked  for,  if  any,  and  that  is  the  law  that  I  expected 
would  be  put  forth  to  try  to  stop  the  strike.  I  never  thought  of  an  eight- 
hour  law,  because  I  knew  that  a  set  of  politicians,  regardless  of  party, 
could  not  work  out  a  law  in  six  months  that  would  successfullj'  apply  to 
the  schedules  on  these  railroads,  either  to  the  satisfaction  of  the  employer 
or  the  employe.  I  never  in  my  wildest  moment  thought  they  would  under- 
take it. 

But  the  first  thing,  you  know,  there  was  a  law,  and  we  were  asked. 
"If  that  law  is  passed  will  you  stop  the  strike?"  We  said  to  him,  "Mr. 
President,  we  will  stop  the  strike  f^henever  your  proposition  that  you  gave 
us  is  complied  with.  Our  men  voted  to  accept  that  and  they  have  gone 
home,  no  matter  how  it  becomes  effective.  That  will  stop  the  strike,  and 
that  is  the  only  way  that  we  can  stop  it.  The  men  who  voted  this  strike 
on  have  gone  home.  They  left  with  us  the  authority  to  declare  it  off  or  to 
stop  it  whenever  your  proposition  is  accepted  by  the  railroad  companies 
or  put  into  effect." 

That  is  the  way  the  law  was  enacted.  That  is  the  way  the  strike  came 
to  be  declared  off  . 

Immediately  thereafter  we  were  told  that  we  had  been  gold-bricked, 
that  it  didn't  mean  this  and  didn't  mean  that.  It  became  effective  or  is  to 
become  effective  on  January  1st.  I  have  my  own  opinion  as  to  just  what 
it  means.  We  have  worked  it  out.  The  National  Congress  of  railroads 
have  their  opinion.     They  worked  it  out. 

Perhaps  no  better  opporttmity  than  this  moment  could  come  to  say 
to  you  that  we,  both  sides  to  this  controversy,  are  carefully  considering 
plans  to  settle  tliis  entire  controversy  out  of  court,  to  settle  it  before 


THE  CENTRAL  STATES  CONFERENCE  73 

January  1st  by  applying  something  satisfactory  to  both  interests,  and 
washing  and  expunging  the  records,  if  you  please.     (Applause.) 

It  is  only  in  a  crude  state  yet,  but  I  know  I  am  not  betrajing  confi- 
dences when  I  say,  some  of  the  very  best  friends,  high  up  in  the  cham- 
bers of  the  operating  departments  of  the  railroads,  favor  something  of 
that  kind.  They  have  discussed  it  with  us.  I  only  left  them  night  before 
last  in  New  York  and  will  go  back  there  again  very  soon.  We  hope  to 
work  it  out,  We  know  if  we  don't  work  it  out  for  ourselves,  the  employes 
and  the  employers,  that  somebody  is  going  to  work  it  out  for  us  and  it 
will  not  be  acceptable  to  either  one.     We  know  that.     (Applause.) 

For  twenty-five  years  these  organizations  have  dealt  across  the  table 
in  the  most  friendly  spirit  and  we  believe  there  is  sufficient  intelligence 
on  both  sides  of  the  table  to  get  together,  man-like,  and  thrash  these 
things  out  and  reach  middle  ground,  and  if  we  do,  take  it  entirely  out  of 
politics  and  go  back  to  a  move  of  establishing  a  federal  commission  of 
some  kind  to  take  the  place  of  this  Board  of  Mediation  and  Conciliation, 
a  commission  of  practical  men  from  both  sides,  appointed  by  this  gov- 
ernment, answerable  to  the  President,  with  full  authority  to  hear  and  dis- 
pose of  all  controversies  that  arise.     (Applause.) 

Take  four  of  these  men  who  have  dealt  with  these  schedules  for  years 
and  years,  take  four  operating  officers,  and  I  could  pick  a  hundred  men 
to  whom  I  would  be  perfectly  willing  to  refer  the  matter  and  abide  by  their 
fairness;  put  those  eight  men  in  the  room  with  authority  to  settle  the 
matter,  cut  them  loose  from  their  organizations,  cut  them  loose  from  their 
railroad  interests,  and  my  honest  opinion  is  that  ninety  per  cent,  or  more 
of  every  grievance,  so  called,  that  originates  today  would  be  settled  and 
settled  satisfactorily.  That  is  the  line  that  is  worthy  of  your  thought. 
It  is  a  line  that  we  are  trying  to  work  out,  and  if  we  do  it  may  stop  this 
so-called  compulsory  investigation.  I  call  it  compulsory  servitude,  invol- 
untary servitude.  Why?  Because  I  do  not  believe  in  this  free  country  of 
ours  that  any  Congress  of  the  United  States  will  ever  pass  a  law  that  will 
compel  a  workman  to  work  when  he  does  not  want  to  work,  unless  he  has 
been  tried  and  convicted  of  some  crime,  as  long  as  the  employer  stands 
for  and  demands,  as  the  manufacturers'  association  went  on  record  some 
years  ago,  according  to  report,  their  right  to  discharge  men  when  they  are 
unsatisfactory,  or  when  they  do  not  want  them,  just  so  certain  do  em- 
ployes have  a  right  to  quit  the  service  when  they  want  to. 

And  I  believe  that  if  the  supreme  court  decisions  are  at  all  to  be  re- 
lied upon,  away  back  in  1897  that  question  was  settled  by  the  United 
States  Supreme  Court  in  the  case  of  U.  S.  vs.  Harry  Ball  and  others,  on 
January  25,  1897,  in  these  words  in  part: 

"We  are  utterly  opposed  to  any  law  enacted  by  the  state  which  will 
in  any  way,  by  consent  or  otherwise,  deprive  the  worker  of  his  right  to 
quit  work  at  any  time  and  for  any  reason  sufficient  to  himself." 

Look  that  up.  It  is  still  the  supreme  court  decision.  And  so  I  am 
ready  to  let  this  question  of  compulsory  servitude,  compulsory  service,  to 
go  to  the  supreme  court  If  necessary. 

Last  night  a  gentleman  referred  to  a  law  where  a  seaman  did  not 
dare  quit  his  vessel  until  the  voyage  was  completed.  I  said  to  him,  "You 
forgot  to  tell  these  gentlemen  that  the  recent  session  of  congress  enacted 
the  seamen's  law,  which  seems  to  have  taken  the  place  of  that  old  decision 
of  the  supreme  court.  The  seamen's  law  has  not  been  carried  to  the  su- 
preme court  by  the  steamship  companies  as  yet,  nor  do  we  think  it  will  be. 
That  seamen's  law  does  what?  It  provides,  among  other  things,  the 
amount  of  butter  and  other  food  a  seaman  must  be  given.  It  provides  the 
kind  of  sleeping  quarters  he  must  be  given.  It  provides  bath  privileges 
for  the  seaman.  It  provides  that  a  seaman  can  quit  at  any  neutral  port. 
It  provides  that  the  master  must  pay  the  seaman  his  wages  within  three 


74  THE  CENTRAL  STATES  CONFERENCE 

days  from  the  day  he  quits,  or  pay  a  penalty  of  two  days'  pay  for  each 
day  thereafter,  one  hundred  per  cent,  penalty,  two  days'  pay  for  one,  that 
is.  If  this  request  of  ours  is  a  twenty-five  per  cent,  increase,  as  alleged, 
might  it  not  even  at  that  stand  the  test  of  the  supreme  court,  if  the  sea- 
men's law  can  pass,  the  seamen's  law  carrying  a  hundred  per  cent,  in- 
crease. 

And  so,  gentlemen,  thi.s  case  has  gone  to  the  supreme  coui't.  We  do 
not  know  what  the  decision  will  be,  but,  frankly  speaking,  I  hope  for  a 
peaceful  solution  of  tliis  question  before  January  1st,  making  it  possible 
for  us  to  go  back,  as  we  have  already  gone,  to  tlie  President,  to  the  de- 
partment of  justice  and  to  congress,  if  necessary,  and  say  to  them,  "Gen- 
tlemen, we  have  had  our  expei-ience.  You  pas.sed  a  law  to  save  a  strike. 
We  worked  out  a  settlement,  doing  what  we  think  you  meant  to  do,  in  a 
way  satisfactory  to  both  interests.  You  will  kindly  forget  that  you  ever 
had  brought  to  your  attention  a  wage  scale,  and  we  will  forever  and  here- 
after keep  away  from  that  building  on  the  hill."     (Applause.) 

Now,  I  haye  exceeded  my  time  by  far.  I  only  want  to  impress  upon 
you  this  fact,  that  the  railroad  companies  were  the  ones  w^ho  appealed 
to  the  government,  not  the  employee.  If  either  party  received  something 
at  Washington  that  they  don't  want,  lay  the  blame  to  the  persons  who 
got  us  to  Washington  by  their  requests,  and  that  would  be  the  railroad 
companies. 

The  President  of  the  United  States  did,  in  my  opinion,  what  any  Presi- 
dent should  do,  and  I  am  saying  that  as  a  lifetime  republican.  (Applause.) 
And  not  alone  that,  I  never  voted  a  national  democratic  ticket  in  my  life 
until  November  7th.  And  until  the  republican  party  gets  back  on  the 
track —  it's  in  the  ditch  now — until  thej'  get  back  on  the  track  I  am  with 
the  democrats.      (Applause.) 

Here  in  the  press  you  see  Woodrow  Wilson  called  a  weakling  and  all 
this.  Why?  I  say  that  as  one  of  the  men  who  for  three  days  and  nights 
and  for  almost  two  weeks  was  with  him  whenever  he  asked,  and  that  was 
pretty  nearly  every  day,  when  we  sat  down  and  talked  this  thing  over 
every  way,  I  say  that  that  is  what  changed  me  politically.  Mr.  Stone,  of 
the  Engineers,  Mr.  Garretson,  of  the  Conductors,  have  always  been  re- 
publicans and  they  all  voted  for  Woodrow  Wilson.  Why?  Because  he 
made  them  like  him. 

In  this  particular  instance  his  one  desire  was  the  public.  When  he 
said  to  us,  "Gentlemen,  you  must  postpone  this.  It  can't  go  on.  You  must 
postpone  it  until  I  can  trj'  to  get  Congress  to  do  something."  AVe  said, 
Zlv.  President,  we  can't.  There  is  not  a  power  on  earth  can  do  it.  If  we 
send  this  message  to  these  men  it  means  a  settlement.  So  we  can't  do  it." 
I  said  to  him,  "If  congress  had  declared  war  on  some  nation,  would  you 
arbitrarily  say  'there  shall  be  no  war?'  "  He  said  right  off  the  reel,  "Yes, 
if  it  were  wrong  I  would  not  permit  it."  Well,  that  is  going  some.  (Ap- 
plause.) I  will  confess  that  I  didn't  feel,  czar  as  I  am,  according  to  some 
of  these  reports,  big  enough  to  say  to  my  140,000  men,  "You  shan't  strike, 
even  though  no  settlement  of  the  question  you  have  voted  upon  was 
made." 

And  so  the  President's  only  desire,  his  greatest  desire,  as  I  saw  it, 
was  for  the  masses,  not  for  us  and  not  for  the  raihoads. 

Now,  the  law  was  passed,  not  creating  the  eight-hour  day  to  start  in 
August,  as  we  expected  it,  but  on  January  1st.     But  what  happened? 

On  the  8th  or  9th  day  of  November  hundreds  of  suits  were  filed  all 
over  this  country.  Against  whom?  Against  the  government,  not  against 
the  organizations.  Those  suits  were  filed  against  the  United  States  gov- 
ernment to  prohibit  the  eight-hour  law  going  into  effect,  and  they  are 
there  yet.     The  railroad  companies  would  not  concede  anything  to  us. 


THE  CENTRAL  STATES  CONFERENCE  75 

They  would  not  concede  anything  to  the  government.  They  have  gone 
into  court  now  to  defeat  the  government  and  we  would  be  put  in  jail  if 
■^ve  even  thought  of  doing  that.  But  the  railroads  seemingly  through  their 
legal  departments  are  bigger  than  the  government,  and  still  they  are  ap- 
pealing for  sympathy,  telling  you  how  earnestly  they  want  to  have  arbi- 
tration—on what?  On  the  roads  where  they  fear  a  fight,  but  on  seventy- 
five  little  ones  they  haven't  use  for  arbitration  and  there  is  nothing  to 
arbitrate  and  they  won't  let  us  talk  about  that. 

Gentlemen,  in  conclusion,  I  want  to  thank  you  for  the  time  I  have 
consumed.      (Applause.) 

Chairman  Murphy:  Apropos  of  President  Lee's  exposition  of  the 
side  of  the  brotherhoods,  I  want  to  relate  a  personal  experience.  A  couple 
of  hours  ago  I  had  what  I  may  say  was  a  never-to-be-forgotten  conversa- 
tion with  Mr.  Lee.  I  asked  him  if  he  would  say  something  this  afternoon 
that  would  put  the  Evansville  Conference  on  the  first  page  of  every  news- 
paper in  the  nation.  Being  a  publisher  I  can  perhaps  better  appreciate 
the  advantage  of  that  than  some  of  you  people.  He  looked  at  me  for  a 
moment,  and  said,  "I  will  try  and  do  it."  And  then  a  moment  later  he 
said,  "Perhaps  I  will."  Your  minds  are  as  acute,  or  more  acute,  than 
mine.  I  think  you  recognize  that  he  has  said  something  of  remarkable 
news  value,  something  of  significant  import.  I  do  not  need  to  point  out 
to  you  what  it  was. 

My  personal  belief  is  that  Mr.  Lee  and  his  fellow  brotherhood  leaders 
are  as  little  satisfied  with  the  Adamson  bill  as  Mr.  Trumbull  and  his  as- 
sociates.    That  is  my  guess.     You  may  have  a  better  guess  than  that. 

With  all  modesty  I  submit  that  the  executive  committee  of  this  con- 
ference has  prepared  an  excellent  program  and  with  all  deference  to  the 
ability  and  with  appreciation  of  the  efforts  of  the  speakers  who  have  gone 
before,  I  think  we  have  reserved  for  the  later  sessions  of  the  conference 
the  real  feast  of  reason. 

I  am  reminded  of  a  story  that  my  friend  George  Ade  is  wont  to  tell. 
He  told  me  not  long  ago  of  a  poker  game  in  which  two  frugal  sports  were 
engaged.  They  were  playing  ten-cent  limit.  One  of  them  picked  up  his 
cards  and  glancing  over  them,  said,  "By  jove,  I  wish  the  limit  weren't  so 
low;  I  would  like  to  bet  a  dollar  on  this."  The  other  fellow  examined  his 
hand  and  replied:  "Well,  I  would  like  to  bet  five  dollars  on  my  hand. 
Let's  raise  the  limit."  The  first  chap  said,  "All  right,  I  will  go  you  one 
better  and  bet  you  a  thousand." 

"Oh,  let's  not  be  cheap  sports;  I'll  bet  you  a  million." 

The  other  fellow  thought  a  moment,  appraised  his  hand  and  said, 
"I  will  go  you  a  billion." 

The  first  man,  after  a  little  deliberation,  said,  "Well,  let's  make  it  a 
trillion." 

"A  quadrillion." 

"Quintillion." 

That  rather  worried  his  opponent  and  he  studied  his  hand  pretty 
carefully  for  a  while.  "Well,"  he  said,  finally,  "I  won't  let  you  have  it  for 
that.     I  will  bet  you  a  sextillion." 

The  second  fellow  looked  at  him  disgustedly  for  a  moment,  then 
threw  his  cardsdown  and  said,  "You  can  go  to  the  devil,  you  are  too  darn 
educated."      (Laughter.) 

Now,  with  all  kindness  to  the  gentleman  who  has  to  follow  on  the 
program,  I  submit  that  he  is  the  best  educated  man  on  questions  of  public 
welfare  that  is  to  be  found  in  the  United  States.  As  independent  in 
thought,  as  he  is  in  politics,  he  has  made  a  big  impress  on  American  af- 


76  THE  CENTRAL  STATES  CONFERENCE 

fairs.  When  I  say  that  in  addition  to  all  of  his  other  activities  he  runs 
three  miles  every  morning  before  breakfast  you  have  some  idea  of  his 
capacity. 

The  pleasure  of  introducing  so  notable  a  speaker  as  Frank  P.  Walsh, 
of  Kansas  City,  falls  to  my  lot. 

Mr.  Frank  P.  Walsh:  Mr.  Lee  has  one  word  to  add,  so  I  will  have 
to  stifle  this  witticism  that  was  about  to  flow  from  me  in  answer  to  the 
chairman's  remarks. 

Chairman  Murphy:     Mr.  Lee. 

Mr.  W.  G.  Lee:  I  would  like  to  get  another  word  in  before  Frank 
Walsh  starts,  because  after  he  gets  started  he  is  mightj-  hard  to  stop.  You 
will  be  well  paid  in  listening  to  him. 

Now,  what  I  wanted  to  say  wa.s  this:  I  should  have  said  before  clos- 
ing that  if  more  representatives  of  the  different  cities,  particularly  through 
the  chambers  of  coniniei-ce,  who  have  been  niisiindei-stood  from  the  labor 
point  of  view,  would  get  togethei-  on  this  subject,  it  would  be  better  for 
all  concerned.  I  am  a  member  of  the  Cleveland  Chamber  of  Conimeire 
and  have  been  for  several  yeais.  I  joined  it  so  that  I  could  get  to  tell 
them  how  much  I  disliked  some  of  the  things  they  were  doing.  I  joined 
it  so  that  they  would  have  to  listen  to  me,  and  as  your  speaker  before 
lunch  said,  hold  up  these  things  until  you  get  bt)th  sides  of  the  questions, 
before  you  make  up  your  mind.  That  is  why  I  joined  the  Cleveland 
Chamber  of  Commerce. 

Now,  if  more  chambers  of  conunerce  would  hold  meetings  of  this  kind 
on  all  impoitant  questions  like  this  one  that  involves  the  Adamson  law 
and  get  all  sides  of  the  controversy  to  come  before  you  and  explain  it,  as 
has  been  done  liere  before  this  conference,  and  as  I  believe  this  conference 
has  done,  there  wo\dd  be  a  different  feeling  over  this  country,  and  you, 
the  people,  you,  the  final  jury,  would  be  in  a  better  position  to  talk  about 
these  matters  than  you  are,  to  hold  up  your  hand  or  say  "aye"  to  some 
resolution  of  which  you  have  only  heard  one  side. 

That  is  what  I  wanted  to  say,  and  now  I  am  through  and  will  yield 
the  floor  to  Mr.  Walsh.     (Applause.) 

A  motion,  giving  Mr.  Lee  a  vote  of  thanks,  was  unanimously  car- 
ried. 

Chairman  Murphy:  I  now  have  the  honor  of  presenting  Mr.  Walsh. 
(Applause.) 


THE  CENTRAL  STATES  CONFERENCE  77 

Our  Country's  Welfare— The  Primal  Object. 

By  Mr.  Frank  P.  Walsh, 
Chairman  of  Federal  Commission  on  Industrial  Relations. 

Mr.  Chairman,  brother  delegates,  ladies  and  gentlemen:  I  would  feel 
a  little  more  assurance  coming  before  you  had  my  good  brother  Murphy 
explained  in  more  detail  the  cause  for  that  run  of  three  miles  before 
breakfast,  as  to  who  was  in  front  and  who  was  behind,  if  anyone. 
(Laughter.) 

A  few  weeks  ago,  in  the  discharge  of  what  I  deemed  to  be  a  duty  of 
common  citizenship,  I  came  to  Evansville,  Indiana.  Excuse  my  ignorance, 
pity  me  for  all  I  missed,  it  was  the  first  time  I  was  ever  off  the  train  at 
Evansville,  Indiana.  I  met  here  a  community  spirit,  a  pull-together  atti- 
tude among  the  business  men,  the  officials  and  the  citizenship  generally 
that  might  well  be  emulated  by  all  of  the  cities  of  the  United  States,  and  I 
found  a  community  for  lively  spirit  and  energy  paralleled  in  no  other  place 
in  the  United  States  except  Kansas  City,  Missouri.      (Applause.) 

So  when  I  was  asked  to  come  here  to  your  conference  need  I  say  that 
I  would  not  have  dared  to  do  so  had  it  been  to  anything  but  a  conference, 
that  I  would  not  have  come  back  here  to  make  a  speech,  but  to  meet  in 
common  with  my  fellow  citizens  from  different  parts  of  this  nation,  to  dis- 
cuss affairs  and  throw  into  the  common  pot  of  knowledge,  or  supposed 
knowledge,  whatever  idea  I  might  have  that  it  might  be  threshed  out.  All 
I  can  say  is,  and  I  am  encouraged  in  what  brother  Lee  has  said,  that  I  be- 
lieve that  this  little  conference  will  turn  out  as  happily  as  the  conference 
I  had  here  a  few  weeks  ago.      (Applause.) 

As  I  say,  I  came  here  because  this  was  a  Conference.  It  was  a  great 
idea.  It  is  an  idea  that  I  hope  is  going  to  rule  tliis  nation,  the  idea  of  com- 
mon interchange  of  thought  which  will  bring  out  a  common  understand- 
ing, which  A\ill  make  us  all  pull  together  for  the  greatest  nation  that  God's 
sun  ever  shown  upon  (applause)  and  for  the  production  of  wealth  under 
circumstances,  so  fair  to  all,  as  vfill  challenge  the  admiration  of  the  world 
and  serve  the  best  thought  of  all  those  that  have  gone  before  and  all  who 
are  still  wi'estling  with  this  one  great  question  of  life. 

I  had  hoped  that  all  of  us  would  have  the  time  to  attend  every  meet- 
ing of  this  conference,  so  that  if  there  were  a  difference  it  might  be 
thrashed  out  upon  the  floor  of  this  house.  It  appears,  however,  that  we 
are  all  busy  men,  and  perhaps  if  these  conferences  are  still  to  go  on,  as 
I  hope  they  will,  for  intelligent  thought  and  action  and  for  the  effect  they 
will  have  upon  the  legislators  of  this  country,  we  will  have  many  oppor- 
tunities in  the  future  to  compare  facts,  or  alleged  facts,  and  to  lay  down, 
as  it  were,  the  different  angles  of  thought  that  animate  us  as  forward  citi- 
zens, I  hope,  of  our  own  republic. 

I  read  wnth  very  great  care  what  was  said  here  yesterday,  by  Mr, 
Thorn  particularly,  and  by  Mr.  Muir.  I  am  only  sorry  that  both  of  the 
gentlemen  are  not  here  to  observe,  to  hear  my  views  upon  these  questions. 
They  treated  the  whole  matter  in  a  very  broad  way,  and  while  I  am  to 
address  myself,  as  I  understand  it,  to  those  phases  of  our  economic  and 
industrial  life  that  finally  became  fructified  in  the  Adamson  law  and  are 
now  agitating  the  American  people,  it  was  my  purpose  to  do  it,  if  I  could, 
as  these  gentlemen  did,  to  treat  it  in  the  broadest  possible  way  and  in  its 
bearing  to  all  citizens  of  this  republic,  regardless  of  the  industry  they 
may  be  engaged  in,  regardless  of  courts  or  politics  or  any  other  abstract 
consideration  except  the  public  weal. 


78  THE  CENTRAL  STATES  CONFERENCE 

Now,  I  agree  with  Mr.  Thorn  that  regulation  in  this  country  has  not 
been  a  success.  I  would  like  to  state,  for  the  purpose  of  argument,  my 
thought  as  to  why  it  has  not  been  a  success.  I  believe  that  it  has  not 
been  the  success  that  it  ought  to  have  been,  because  every  fundamental 
step  in  regulation  has  been  consistently  fought  by  the  railroads  of  this 
country  in  every  state  in  this  union,  as  well  as  against  the  operations  of 
the  Interstate  Commerce  commission.      (Applause.) 

I  do  not  analyze,  nor  do  I  propose  to  confute,  nor  would  I,  any  of 
the  facts  and  figures  submitted  by  Mr.  Thom.  I  will  agree  that  they 
are  correct  in  their  basic  analysis,  but  I  do  wish  to  most  seriously  dis- 
agree with  Mr.  Thom  in  the  thought  that  he  gave  forth  to  this  conven- 
tion as  to  what  he  called  the  Genesis  of  the  regulation  of  railroads.  If 
figures  were  essential  I  am  afraid  that  I  would  have  to  say  that  if  to  my 
thought  Mr.  Thom  was  as  far  off  in  his  figures  as  he  is  in  his  Genesis 
I  would  have  to  disagree  with  him  in  toto. 

He  said  that  regulations  sprang  from  the  bitter  contests  between 
contending  interests,  upon  the  one  side  the  public,  and  upon  the  other 
side  the  owners  of  the  railroads,  who  believed  that  they  were  operating 
absolutely  in  the  field  of  private  ownership  and  that,  therefore,  the  public 
had  no  concern  in  what  they  were  doing  in  respect  to  the  operation  of 
railroads.  I  disagree  with  him  because  his  argument  in  its  essentials 
denies  the  idea  laid  down  in  the  plain  terms  of  the  constitution  of  the 
United  States,  made  at  the  beginning  of  this  republic,  broad  enough  so 
that  every  law  passed  for  the  regulation  of  the  railroads  was  so  clearly 
constitutional  as  to  leave  no  room  for  doubt  in  that  realm. 

I  likewise  disagree  with  the  thought  of  his  Genesis  on  the  part  of  the 
owners  of  these  railroads,  when  I  look  back  to  the  beginning  of  that 
great  industry  in  this  country  and  see  that  the  people,  that  you  and  I, 
that  all  of  us,  gave  to  those  railroads  as  their  contribution  an  empire  in 
land  greater  than  all  France  and  Belgium  combined,  greater  than  the 
entire  German  empire,  and  greater  in  area  than  the  state  of  Texas,  whose 
northeastern  corner  is  closer  to  Chicago  than  its  southwestern  border  is 
to  the  City  of  Texarkana  in  its  own  state.  I  see  there  the  written  declara- 
tion of  the  organic  law  of  this  country  which  says  to  my  mind,  and  which 
I  believe  should  say  to  every  intelligent  mind,  that  the  conduct  of  railroads 
in  this  nation  is  not  even  a  quasi-public  function  but  an  absolute  and 
indisputable  function  of  the  government  itself,  one  of  those  functions 
that  can  properly  be  delegated  to  private  hands,  but  partaking  so  much 
of  the  idea  of  sovereignty,  of  the  expression  of  life  in  the  nation,  and  of 
the  pursuit  of  happiness  as  to  make  it  a  part  of  the  inalienable  rights  of 
the  people  at  any  time  they  care  to  exercise  them.  If,  as  a  matter  of 
fact,  following  in  all  the  years,  following  the  great  railroad  development, 
following  the  civil  war,  the  people  gave  no  concern  to  this  important  func- 
tion of  the  government  certainly  does  not  leave  it  to  be  argued,  if  my 
intelligence  grasps  this  as  I  believe  it  really  is,  that  any  intelligent  person 
had  a  right  to  ever  proceed  upon  the  theory  that  it  was  a  matter  of  private 
ownership  in  which  the  public  had  no  concern.      (Applause.) 

Now,  of  course,  I  would  not  criticise  anything  but  the  viewpoint  of 
these  gentlemen  and  yet  I  would  not  pass  by  what  I  believed  to  be  ob- 
vious error  for  the  sake  of  having  the  conference  at  all  times  pleasant. 
No  person  in  the  world  despises  the  attitude  of  the  death's  head  at  the 
feast  more  than  I  do.  No  person,  I  am  sure,  within  the  sound  of  my 
voice  feels  the  elation  that  I  feel  at  hearing  what  has  just  been  uttered 
upon  this  forum,  but,  as  I  say,  we  are  discussing  these  things  now  for  the 
common  good  and  let  us  get  our  bases  so  we  will  understand  each  other, 
not  only  for  this  exigency  but  for  all  time  in  the  future. 

I  take  the  two  arguments  presented  by  these  two  very  able  gentlemen, 
for  whom  I  have  the  most  profound  personal  respect,  as  well  as  for  their 


THE  CENTRAL  STATES  CONFERENCE  79 

qualities  of  mind  and  general  intelligence  covering  the  subject  upon 
which  they  speak,  but  I  find  the  logic  in  the  argument  of  Mr.  Thom  to  be 
that  on  account  of  the  regulation  which  has  not  been  centered  properly 
by  the  states  of  this  union  that  investors  are  timid  and  that  the  great 
operation  of  providing  means  of  transportation  in  this  country,  almost  if 
not  altogether,  at  an  end,  because  investors,  frightened  away  in  their 
timidity  refused  to  put  up  the  money  necessary  to  carry  on  this  great 
public  function,  now  in  private  hands,  and  I  read  the  argument  of  Mr. 
Muir  who  says  that  in  fifteen  years  the  ownership  in  the  railroads  have 
increased  and  become  more  generally  diffused  to  the  extent  of  from  one 
hundred  thousand  investors  in  1901  to  six  hundred  thousand  investors 
in  1915.      (Applause.)* 

And  I  listened  to  the  figures  given  by  our  friend  Clifford  Thome, 
in  which  he  challenges  these  very  able  gentlemen  that  preceded  him  and 
followed  him  to  deny,  and  I  see  the  reason  why  the  investors'  circle  is 
rapidly  being  extended,  and  I  indulge  the  hope  that  they  will  be  in  per- 
fect justice  so  treated  by  the  government  of  the  United  States  that  it  will 
be  for  a  long  time  to  come  as  fruitful  a  source  for  investors  in  the  future 
as  it  has  been  in  the  past  15  years.      (Applause.) 

I  should  like  to  refer  to  what  I  might  call  the  complaint  of  Mr.  Muir 
with  regard  to  the  actions  of  the  brotherhoods  and  the  alleged  inactivity 
of  the  investors  in  railroad  stocks  and  their  securities.  He  says,  and  I 
quote  his  own  language,  "that  the  giant  should  not  exercise  his  power 
tyrannically,  that  these  brotherhoods  never  should  have  forced  the  govern- 
ment of  the  United  States  into  the  position  which  they  did."  And  that 
the  only  reason  they  did  it  was  because  the  investors,  six  hundred  thou- 
sand strong,  as  against  their  four  hundred  thousand  strong  were  un- 
organized, that  they  had  not  learned  the  benefit  of  organization,  while 
these  men  had  thrown  in  a  dollar  here  and  a  dollar  there,  not  steadily, 
but  organizing  all  the  time,  so  that  they  possessed  the  economy  of  con- 
centrated power  of  demanding  things  from  the  government  that  the  rail- 
road investors  could  not  demand. 

Now,  as  I  say,  not  wishing  to  animadvert  to  the  statements  in  a 
manner  that  would  be  offensive,  I  stand  here  for  the  purpose  of  broad 
truth  to  say  there  never  was  as  compact  an  organization  industrially, 
politically  and  financially  as  has  been  the  organization  of  railroad  execu- 
tives. (Applause.)  Need  I  refer  to  the  fact  that  for  years  and  years 
they  absolutely  dominated  the  legislatures  of  the  various  states?  Could 
I  sit  here  in  the  presence  of  gentlemen  that  I  know  and  name,  name  after 
name,  not  that  represented  them  as  Mr.  Muir  said  in  a  narrow  way  and 
openly,  but  as  a  part  of  the  perfected  political  organization  that  existed  in 
every  typical  railroad  state  in  the  United  States?  And  need  I  call  atten- 
tion to  what  transpired  in  my  own  state,  and  that  for  over  twenty-five 
years  fought  the  passage  of  the  law  conceded  today  to  be  as  just  and 
necessary  to  the  transaction  of  the  railroad  business  and  the  administra- 
tion of  justice  as  the  law  abolishing  the  rule  of  fellow-servant,  fought  for 
for  twenty  years  and  fought  against  by  the  lobby  of  the  railroad  com- 
panies? Need  I  enumerate  the  many  states  where  mens'  names  have 
gone  down  as  railroad  governor?  Need  I  read  through  the  great  list  of 
men  whose  actions  -won  them  the  title  of  railroad  senators  in  the  Senate 
of  the  United  States?  And  I  want  to  state  here  again,  for  the  purpose 
of  elementary  truth,  that  they  have  been  organized  more  compactly,  with 
greater  force  and  a  greater  means  of  carrying  on  their  objects  on  the 
field  of  industry  than  they  were  even  in  the  political  field  or  in  the 
field  of  finance.      (Applause.) 

I  expect  later  to  refer,  perhaps  more  specifically  to  those  things  that 
ought  to  animate  our  ardor  as  Americans  today  in  bringing  about  the 
solution  of  these  questions  that  seem  to  be  closer  to  us,  and  I  might  say 
that  one  of     my  reasons  for  being  here  today  is     because  I  believe     the 


80  THE  CENTRAL  STATES  CONFERENCE 

railroad  operators  fatuously  and  without  weighing  all  that  it  means  to 
the  people  of  the  United  States  and  for  our  future  are  taking  a  wrong 
attitude,  to  consideration  of  which  I  believe  is  the  primal  right  and  the 
primal  reason  for  our  being  here  today,  as  I  understand  it,  and  it  should 
be  taken  into  consideration  that  the  railroad  companies  of  this  country  are 
a  part  of  the  armed  forces  which  seem  to  stand  ready  in  the  various  states 
to  do  away  with  the  civil  processes  in  these  disputes,  that  seem  to  be 
stronger  than  the  action  of  civil  officers,  as  has  been  demonstrated  in 
state  after  state  of  this  union.  To  illustrate  that,  may  I  say  that  the 
Pennsylvania  Railroad  Company  has  armament  enough  and  potential  force 
enough  to  use  those  armies  to  overthrow  a  sudden  effort  upon  the  part 
of  the  militia  of  Pennsylvania  to  subjugate  or  master  a  situation  which 
they  might  be  called  upon  to  master.  I  give  you  that  simply  as  one  inci- 
dent, as  one  great  truth  that  we  ought  to  consider  in  leading  up  to  a  con- 
sideration of  the  subjects  that  we  have  before  us  today. 

Now,  my  friends,  I  may  not  agree  in  all  that  my  brother  Lee  has 
said;  no  more  do  I  agree,  as  has  been  expressed  here,  with  what  my 
brothers  Thorn  and  Muir  have  said,  but  I  shall  try  to  give  my  experience 
as  an  American  citizen  and  I  believe  that  I  can  be  excused  for  the  same 
amount  perhaps  of  personal  reference  as  the  other  speakers  have  very 
properly  indulged  in. 

I  never  was  a  member  of  a  labor  union.  I  never  belonged  to  a  craft 
in  which  there  was  an  organization.  As  a  practicing  lawyer  for  thirty 
years,  I  have  been  the  general  attorney  for  public  utility  corporations  as 
well  as  steam  railroads;  and  certainly  nothing  that  I  say  here  today,  I 
hope,  can  be  thought  to  eminate  from  any  angle  that  had  its  origin,  either 
in  personal  interests  or  in  an  education  along  lines  that  has  a  tendency 
to  make  a  man's  thought  run  in  a  given  direction. 

Broadly  speaking,  every  human  being  has  the  impulse  of  freedom; 
every  charter  of  right  wrung  from  every  tyrannical  ruler  in  the  history  of 
the  world  had  it  for  its  very  foundation  stone.  Thoughtful  men  see  no 
difference  in  the  processes  by  which  one  man  may  be  enslaved  or  im- 
peded in  the  operation,  if  you  could  call  it  that,  of  his  own  self  expression. 
Whether  a  man  stood  over  me  with  a  whip  in  his  hand  and  compelled  me 
to  perform  a  designated  task,  or  whether  another  had  been  so  circum- 
stanced, either  through  his  own  efforts  or  something  fortuitous,  as  to  give 
him  the  control  over  what  I  needed  in  order  to  make  my  living  and  leave 
me  in  fear  that  I  should  starve  or  would  not  have  the  competence  to  raise 
my  children  or  spend  perhaps  my  old  age  in  poverty,  thus  preventing  my 
giving  expression  to  my  higher  self,  makes  no  difference  to  me  or  any 
other  reasoning  man. 

Many  of  us,  one  way  or  another,  have  won  our  economic  independ- 
ence, but  great  bodies  of  men  fail  to  do  so,  not  through  the  fault  of  any 
person  living  at  that  particular  time,  but  perhaps  through  the  fault  of  the 
institutions,  of  the  false  education,  if  you  will,  and  other  circumstances 
over  which  they  had  no  control. 

These  men  banded  together  in  the  early  days  of  our  republic  and 
started  the  Genesis  of  the  labor  unions.  The  issues  which  confront  us 
today  have  as  their  chief  proponents,  or  at  least  all  persons  as  a  class  or  as 
a  mass  upon  one  side  of  the  question.  Briefly  stated  it  was  the  effect  of 
men  by  combining  together  to  secure  that  degree  of  economic  independ- 
ence that  they  could  not  secure  one  by  one. 

The  keystone  of  their  organization  is  the  right  of  collective  bar- 
gaining. Please  get  that  Avord,  if  I  am  to  transmit  my  thought  to  you, 
the  right  of  collective  bargaining.  Not  something  handed  to  them  by 
other  than  that  means,  not  something  handed  to  them  because  they  con- 
vinced some  person  higher  in  authority  that  they  ought  to  have  it,  but 
the  right  of  collective  bargaining  means  in  its  last  analysis  the  right  to 


THE  CENTRAL  STATES  CONFERENCE  81 

cany  on  the  production  of  the  world  co-operatively  by  those  who  produce 
the  wealth  of  the  world.  In  other  words,  it  is  the  denial  of  the  existence 
of  a  master  class  or  of  a  superior  order.  It  takes,  if  I  understand  it 
properly,  into  consideration  that  brainpower  necessary  to  plan,  as  dis- 
tinguished from  the  brawn  and  muscle  necessary  to  execute.  It  takes  into 
consideration  as  well  as  those  two  factors  the  element  of  distribution 
under  which  railroads  might  properly  come,  and  the  right  of  the  em- 
ployed to  demand  the  right  to  be  compensated  for  the  very  great  service 
which  he  renders  to  society. 

Those  organizations  have  grown  until  we  find  today  presented  in  its 
highest  development  the  idea  that  I  have  tried  to  express  here  in  the  four 
brotherhoods,  now  contending  before  the  country  for  the  right  to  work 
but  eight  hours  a  day. 

Now,  for  the  purpose  of  this  little  argument,  I  am  going  to  strip 
this  question  of  everything  except  the  eight-hour  principle.  I  am  going 
to  give  my  conclusions  and  give  my  voice  for  what  it  is  worth. 

The  basis  of  the  demand  for  the  eight-hour  law  has  been  expressed 
by  the  president  of  one  hundred  millions  of  people  and,  on  a  direct  issue, 
has  been  ratified  by  the  greatest  majority  ever  given  a  man  that  ran  for 
president.  (Applause.)  He  says  that  society  is  insistent  in  its  demand 
that  no  man  be  forced,  in  order  to  earn  a  living,  to  work  over  eight  hours 
a  day.  Our  government  has  acted  upon  it  nationally.  Thirty  state  gov- 
ernments have  acted  upon  it.  Every  society  of  scientific  research  along 
industrial  and  social  lines  that  has  given  it  any  consideration,  every  inde- 
pendent society  in  the  United  States  or  Europe  has  declared  for  the  eight- 
hour  day  upon  this  basis,  perhaps  with  a  slightly  different  wording  but 
practically  in  the  language  of  the  president  of  the  United  States,  that  the 
physical  well  being,  the  opportunities  for  mental  development  and  recre- 
ational needs  of  man  require  that  he  should  not  be  compelled  to  work 
over  eight  hours  a  day.  Some  gentlemen  have  grasped  this  idea  awk- 
wardly, it  would  seem,  so  far  as  the  basis  is  concerned  and  believe,  it 
would  seem,  so  far  as  the  basis  is  concerned  and  believe,  or  say  they  be- 
lieve, it  depends  upon  a  question  of  bodily  fatigue  that  breaks  down  the 
human  economy  or  of  monotony  which  has  an  evil  effect  upon  the  nervous 
system  and  upon  the  operations  of  the  mind,  and  it  is  to  conserve  in  that 
narrow  way  that  this  proposition  is  laid  down. 

Far  from  it.  There  is  something  greater  even  than  life,  and  that 
is  the  opportunity  for  mental  development,  to  engage  in  all  of  these 
operations  and  personal  enterprises  that  make  for  the  joys  of  life  and 
that  raise  us  from  the  level  of  the  dumb  brute  into  that  realm  of  reason- 
ing and  thinking  that  God  Almighty  intended  all  of  his  children  to  dwell 
in.      (Applause.) 

And  so  the  happiness  of  mankind  was  to  be  conserved,  his  recre- 
ational needs  demanded  it.  And  so  we  find  in  the  year  1916  four  great 
organizations  that  have  attained  their  economic  Independence.  Why  do 
I  say  that? 

The  President  of  the  United  States  could  not  command  me  tonight  to 
endeavor  to  drive  a  train  to  Kansas  City,  to  my  home.  I  do  not  know 
how  to  do  it.  I  would  lose  my  life  and  I  would  cause  the  wreck  of 
other  men's  lives.  The  President  of  the  United  States  could  not  command 
me  today  to  take  a  shovel  and  pick  to  dig  a  ditch,  although  I  am  better 
able  to  do  it  than  many  of  the  men  I  see  performing  that  operation  in  the 
streets  of  our  cities.  Why?  Because  I  will  it  otherwise.  I  have  attained 
my  economic  independence.  I  am  not  afraid  of  where  my  breakfast  is 
coming  from  in  the  morning.  I  have  mapped  out  my  whole  life,  and  so 
far  successfully,  as  you  have.  I  am  engaged  not  in  work  but  in  the 
practice  of  a  profession  through  which  I  believe  at  least  I  can  give  ex- 
pression to  that  which  I  believe  to  be  for  the  service  of  mankind  and  which 
I  wish  above  all  other  things  to  do. 


82  THE  CENTRAL  STATES  CONFERENCE 

Now  then,  these  men  have  reached  the  point  where  they  can  say 
no.  And  why?  Because  they  in  numbers  have  reached  that  point  where 
the  railroad  operations  of  this  country  would  be  seriously  impeded,  if  not 
absolutely  suspended,  in  case  they  withdrew  from  the  employment  of 
those  railroad  companies  in  a  body.  They  simply  have  gone  through 
twenty-five  years  of  strife,  in  which  there  was  bloodshed,  in  which  there 
was  sacrifice,  in  which  there  was  disgrace  for  many  men,  in  which  there 
was  breaking  up  of  homes,  in  which  finally  a  God-given  intelligence 
seemed  to  shine  out  and  teach  them  that  nothing  in  this  world  was  ever 
gained  by  violence,  by  marching  on  through  the  path  of  education  they 
felt  that  brainpower  and  strength  of  purpose  were  the  first  qualities  in 
an  immense  organization  of  that  kind  that  absolutely  had  the  power  in 
itself  to  demand  the  eight-hour  day  upon  the  basis  that  all  organized  in- 
telligent society  says  a  man  is  entitled  to  in  order  to  make  a  living  in  this 
great  world  of  ours. 

Now,  I  am  not  going  into  the  technique  of  what  happened  that 
brought  that  question  so  sharply  before  this  country,  but  I  do  want  to 
say  with  as  warm  a  feeling  of  kinship  to  the  great  railroad  executives 
of  this  country,  to  whom  we  owe  so  much,  as  I  ever  felt  towards  a  tuman 
being  in  my  life,  that  great  care  in  this  situation  ought  to  be  given  to 
what  happened  leading  up  to  this  controversy. 

The  President  of  the  United  States  spoke  to  those  gentlemen  spe- 
cifically and  locally,  but  generally  to  all  the  people  of  the  United  States, 
that  the  eight-hour  law  was  not  arbitrable.  Some  check  must  be  put, 
must  it  not,  upon  the  activities  of  men  whose  interests  might  perhaps 
clash,  whose  personal  interests  are  very  likely  to  clash?  In  other  words, 
it  is  very  difficult  for  a  man  to  be  a  judge  in  his  own  case,  to  pass  upon 
a  question  that  might  seriously  affect  his  own  future  and  his  own  fortune. 

Generally  speaking,  society  comes  to  viewpoints  as  a  whole  in  a  more 
or  less  abstract  manner.  We  did  away  with  the  question  of  serf  and 
master  among  the  bright  peoples  of  the  world;  and  in  the  tumult  of  soci- 
ety and  in  rivers  of  blood  we  did  away  with  the  idea  of  chattel  slavery 
among  any  kind  of  men  upon  the  face  of  our  own  continent.  It  confis- 
cated property,  it  affected  the  existing  order  and  age-old  institutions,  but 
when  the  thought  of  the  world  emerged  to  that  point,  it  was  unjust  and 
it  had  no  basis  for  its  being  and  it  had  to  pass  to  a  new  order,  to 
the  higher  and  the  better  one  to  which  we  must  always  aim  and  to  which 
the  world  must  attain,  always  and  always. 

And  so  the  President  of  the  United  States  told  these  gentlemen  in  a 
most  solemn  manner  that  that  is  not  arbitrable.  And  what  does  he  have 
behind  it?  Society  and  the  world  have  found  that  the  physical  well 
being  demands  that  a  man  should  not  work  longer  than  that.  That  goes 
into  the  very  right  of  life  itself.  Where  is  the  authority  that  can  tell  me, 
a  free  man,  that  I  must  do  something  that  will  undermine  my  health,  or 
make  my  days  in  the  land  shorter  than  what  God  and  nature  perhaps 
intended  that  they  should  be?  What  power  is  there  in  railroad  execu- 
tives, in  congresses  or  in  supreme  court  judges  to  so  control  my  life  as  to 
tell  me,  if  I  have  the  power  to  do  it  myself,  the  length  of  time  that  I 
shall  toddle  my  baby  on  my  knee  or  look  into  the  eyes  of  my  good  wife 
at  home?  What  power  is  there  in  railroad  executive  or  officiaf  that  can 
tell  me,  if  I  have  the  power  in  myself,  that  I  shall  work  longer  to  make  a 
living  than  that  time  which  gives  me  an  opportunity  to  develop  my  own 
mind  and  to  look  after  the  education  of  my  own  children,  and  I  leave  out 
of  consideration  altogether  my  recreational  needs,  which  are  as  necessary 
to  life  and  happiness  as  the  first  two,  perhaps,  fully.  Where  is  the 
authority? 

I  say  that  in  a  free  society  there  can  be  no  such  authority.  I  say 
that  our  education  amounts  to  nothing  unless  our  minds  are  so  sharp- 


THE  CENTRAL  STATES  CONFERENCE  83 

ened  and  our  viewpoints  so  changed  from  the  past  that  we  can  meet  with 
those  brothers  of  ours,  engaged  in  the  production  of  wealth,  and  by  our- 
selves and  without  any  compulsion  lay  down  those  rules  that  conserve  life, 
mental  development  and  happiness,  in  the  production  of  wealth  in  that 
industry  in  which  we  are  all  engaged. 

Now,  then,  it  has  been  said  that  this  was  a  matter  for  arbitration,  on 
the  part  of  the  executives.  You  are  met  with  the  stonewall,  the  unde- 
niable, basic  hypothesis  that  no  man  will  arbitrate  the  length  of  his 
life,  his  own  health  or  his  own  mental  development,  and  you  are  brought 
face  to  face  with  it  in  an  industry  not  only  in  which  four  hundred  and 
fifty  thousand  men  are  engaged — and  I  say  without  offense  to  the  execu- 
tives, if  I  were  going  to  determine  whether  or  not  a  thing  was  right  and 
just  in  an  industry,  I  would  take  the  450,000  that  operated  the  trains 
before  I  would  take  the  railroad  executives,  much  as  I  agree  with  the  idea 
that  they  have  performed  their  jobs  well,  because  I  believe  that  there  is 
higher  intelligence  in  numbers,  and  I  believe  the  greater  experiences  of  a 
great  number  of  honest  men,  when  they  can  give  voice  to  the  experience 
that  they  have  had  are  better  than  those  of  a  small  number,  so  that  if  we 
are  dealing  with  them,  not  as  a  matter  of  compulsion,  but  as  a  matter 
of  co-operation,  I  would  call  upon  the  450,000  before  I  would  the  175  or 
whatever  the  number  is. 

Arbitration  upon  such  a  subject,  therefore,  is  impossible.  When  the 
organized  thought  of  free  society  says  that  it  is  impossible,  then  it  is  im- 
possible of  performance,  no  matter  what  a  few  gentlemen  may  think 
about  it. 

Much  has  been  said  about  compulsory  investigation,  a  sort  of  com- 
pulsory arbitration.  May  I  say  for  the  purposes  of  this  debate  that  we 
are  having  here  and  for  the  purpose  of  a  better  understanding  perhaps, 
that  that  has  been  very  well  tried  out  under  the  Lemieux  act  in  Canada, 
and  the  part  that  would  make  it  operative  in  the  present  emergency  has 
absolutely  failed  to  work  out  in  Canada.  The  Lemieux  act  provides  that 
in  all  public  utilities,  sach  as  steam,  urban  and  interurban  railways,  and 
in  the  coal  mining  industries,  where  there  is  a  dispute  between  the  em- 
ployers and  the  employed,  that  it  should  be  submitted  to  a  public  investi- 
gation and  that  pending  that  investigation  it  shall  be  illegal  for  the  em- 
ployers to  lock  out  their  employees,  or  for  the  employees  to  go  upon  a 
strike. 

Drastic  penalties  were  attached  to  the  act  for  violation  of  any  part 
of  it.  In  a  coal  mine  strike  many  men  were  confined  in  jail  for  giving 
sustenance  and  assistance  to  men  that  went  out  on  a  strike,  as  well  as  the 
actual  strikers  in  this  particular  coal  industry.  And  when  it  came  to  the 
same  proposition  with  the  employes  of  the  Grand  Trunk  Railway  who 
allied  themselves,  that  the  strike  was  called  regardless  of  the  law,  and  the 
gentleman  that  wrote  that  law  and  testified  before  the  commission  on 
industrial  relations,  Mr.  W*.  L.  McKenzie,  said  there  would  not  have  been 
jails  enough  in  the  Dominion  of  Canada  to  hold  those  men  that  violated 
the  law,  claiming  that  no  power  existed  in  the  government  to  make  them 
work  if  they  didn't  so  desire  to  do. 

Now,  what  is  the  use  of  talking  about  transplanting  that  law  to  this 
country  that  has  for  its  underlying  principles  the  right  of  personal  liberty 
as  expressed  in  the  American  declaration  of  independence  and  attempted 
to  be  conserved  in  every  line  of  the  constitution  of  the  United  States  and 
the  spirit  which  is  supposed  to  run  through  all  the  laws  of  Congress  and 
all  the  legislatures  of  the  United  States  of  America. 

If  a  man  can  be  compelled  to  work  for  one  hour,  logically  he  can  be 
compelled  to  work  for  a  week  or  a  month  or  in  fact  for  a  lifetime.  It  is 
opposed  to  every  fundamental  principle  of  our  government,  and  whether 
Congress  passes  it  or  not,  it  cannot  be  operative. 


84  THE  CENTRAL  STATES  CONFERENCE 

Now,  I  want  to  call  attention  to  one  other  thing  as  indicative  of  the 
state  of  the  nation  today  upon  these  industrial  subjects.  Did  you  hear  Mr. 
Lee  say  from  this  platform  that  they  were  going  to  abide  by  any  decision 
of  the  Supreme  Court  of  the  United  States?  Now,  mark  you,  I  might 
have  serious  controversy  with  gentlemen  that  hold  certain  views;  you 
may  have,  too,  but  we  should  not  be  like  the  ostrich,  bury  our  heads  and 
observations  so  that  we  could  not  look  at  the  facts. 

Do  you  recall  that  on  the  day  the  hearing  was  called  on  the  Adam- 
son  law  in  Washington,  that  a  body  of  laborers  representing  more  than 
2,250,000  actual  workers,  with  their  kin  and  dependents  amounting  to 
more  than  6,000,000  of  the  organized  wealth  producers  of  this  country,  in 
solemn  convention  declared  that  if  injunctions  were  issued  or  processes 
taken  by  the  courts  to  take  away  what  they  considered  their  rights  as 
citizens,  that  they  in  a  body  would  violate  the  law,  let  the  consequences 
be  what  they  may?  Do  you  see  what  is  going  on  in  this  country  today? 
If  you  do,  then  you  have  the  same  serious  thought  with  reference  to  the 
perpetuity  of  our  institutions  without  the  most  severe  shocks  that  I  have 
as  I  speak  to  you  today. 

Out  on  the  Pacific  Coast  was  committed  the  most  abominable  crime 
almost  in  the  whole  history  of  this  country.  Scores  of  innocent  persons 
were  crippled  and  wounded  and  nine  human  beings  hurled  into  eternity 
by  the  explosion  of  a  dynamite  bomb;  five  men  arrested  and  put  upon 
their  trial;  meetings  being  held  all  over  the  United  States  declaring  that 
those  men  were  selected  on  account  of  the  fight  that  was  being  made  by 
thfe  chamber  of  commerce  against  organized  labor  and  that  they  were 
absolutely  Innocent  and  that  they  were  picked  out  because  they  were 
heads  of  labor  organizations  and  agitators  along  what  might  be  called  the 
extreme  ideas  of  labor  organizations,  and  the  facts  covering  that  abomi- 
nable crime  were  obscured.  Perhaps  men  that  ought  to  be  restrained,  if 
their  lives  not  taken  by  the  law,  will  escape  scot-free;  and  in  any  event 
thousands  and  thousands  of  our  fellow  citizens  will  begin  to  doubt 
whether  the  law  was  made  to  apply  equally  to  all  men. 

I  recall  the  case  in  Seattle,  Washington,  where  the  president  of  the 
largest  shipbuilding  company  upon  the  Pacific  Coast,  testifying  before 
the  Commisison  on  Industrial  Relations,  declared  his  opposition  to  the 
Clayton  act  which  removed  labor  unions  and  fraternal  organizations  from 
the  operations  of  the  Sherman  anti-trust  laws  in  such  vigorous  language 
that  he  declared  against  all  laws  and  all  governments  and  all  executives, 
declared  that  a  revolution  was  coming  on,  and  that  he  was  ready  to  join 
in  that  revolution,  a  man  of  great  intensity  of  purpose  and  of  tremendous 
activity  and  energy  upon  the  Pacific  Coast.  I  follow  along  and  I  say  that 
they  have  the  right  to  declare  that  they  have  the  right  of  free  speech,  to 
bring  about  better  conditions  in  the  lumber  camps  in  the  northwest,  and 
these  men,  and  here  is  a  disgrace  of  modern  conditions,  are  attacked  by 
men  under  authority  of  law  and  mowed  down  by  bullets  and  their  lives 
taken.  I  am  not  here  to  pass  upon  the  rightfulness  or  the  wrong  of  the 
prosecutions  that  may  follow  or  the  arrests  that  were  had  there,  but  I  do 
figure  from  cau.se  to  effect  and  I  say  as  an  American  citizen  that  when 
anarchy  is  proclaimed  in  that  way  that  we  must  reap  what  we  have  sown. 

We  have  these  contentions  going  on  all  over  the  United  States  and  in 
every  place  the  efficacy  of  the  law  being  attacked  by  a  large  number  of 
people.  If  an  official  in  some  instances  performs  his  duty  in  a  way  that 
he  thinks  Is  proper  and  right,  but  which  seems  to  conserve  the  interests 
of  what  might  be  called  the  weaker  classes  of  the  producers  of  the  country 
he  is  attacked  as  a  demagogue.  (Applause.)  His  facts  perhaps  are  not 
disputed.     His  conclusions  drawn   from  facts  are  not  questioned  at  all. 


THE  CENTRAL  STATES  CONFERENCE  85 

But  he  is  personally  attacked.  Again,  an  officer  attempting  to  uphold  the 
law,  to  see  that  justice  is  absolutely  conserved  and  the  law  absolutely 
enforced,  instead  of  having  his  acts  questioned  and  brought  into  the 
forum  perhaps  of  public  discussion,  if  proper  in  a  campaign  or  otherwise, 
he  is  attacked  as  an  enemy  to  labor  or  an  enemy  to  the  down-and-out,  the 
producing  class — a  tyrant  or  such  names  as  that  applied  to  him.  So  we 
must  look  at  these  things  just  as  they  are. 

I  said  that  was  the  greatest  crime  in  my  recollection  at  San  Fran- 
cisco. I  withdraw  that  and  say  that  it  was  not  as  great  as  the  crimes 
committed  by  the  industrial  organization  in  the  fields  of  southern  Colorado 
in  the  persons  of  the  operators  of  those  coal  mines  out  there.  I  speak 
now  outside  of  the  realm  of  controversy  or  anything  that  our  commission, 
the  congressional  committee  or  the  courts  of  Colorado  found, 
but  of  how  the  supreme  court  of  Colorado,  denounced  those 
officials  and  the  operators  that  were  in  league  with  them  as  potential 
anarchists  that  were  disintegrating  the  very  fabric  of  the  state  of  Color- 
ado. I  take  the  awful  butchery  of  those  men,  women  and  children  in  cold 
blood,  unarmed  men  and  helpless  women  and  children,  and  the  application 
of  the  torch  to  burn  down  the  only  habitations  they  had  upon  earth,  and 
I  take  back  what  I  said  about  San  Francisco,  and  I  say  that  that  situa- 
tion in  Colorado  more  than  paralleled,  it  absolutely  made  it  fade  away  in 
point  of  inherent  infamy  and  coldbloodedness. 

Now,  I  say  these  things  to  you,  my  friends,  because  I  am  trying  to 
lead  to  what  I  believe  to  be  the  underlying  thing  that  is  causing  the  con- 
tention over  this  Adamson  law,  down  to  the  present  time.  Consciously  or 
unconsciouslj',  it  is  the  grappling  for  power,  the  dislike  upon  one  side 
when  it  holds  the  power  to  give  it  up,  and  the  contention  of  many  other 
men  that  they  cannot  be  free  and  cannot  live  their  own  lives  unless  they 
have  equal  power  with  those  who  would  deny  it. 

I  say  that  the  most  significant  thing  about  this  whole  situation  is  the 
attitude  not  only  of  these  brotherhoods  but  of  organized  labor  in  this 
country  towards  the  courts.  They  are  absolutely  paying  no  attention,  do 
you  know  it,  to  the  highest  judicial  body  in  the  world.  The  contest  in 
court  is  between  the  railroads  upon  one  side  and  the  government  upon 
the  other.  There  is  no  primary  student  of  the  law  that  did  not  believe 
it  was  the  law  that  the  subject  could  not  sue  the  sovereign,  that  no  man 
could  sue  the  government  of  the  United  States.  The  right  of  a  state  to 
sue  the  government  had  to  be  put  into  the  constitution  by  an  amendment 
after  the  original  document  was  drawn.  And  here  are  the  railroads 
suing  the  government  of  the  United  States  to  prevent  the  operation  of  a 
criminal  law  that  has  for  its  object  the  conservation  of  life  of  human 
beings  in  the  United  States  of  America. 

Think  for  a  moment!  Consider  what  that  means!  The  pleadings, 
and  I  have  seen  many  of  them,  filed  in  these  cases  so  far  as  the  heads 
of  these  brotherhoods  are  concerned  are  on  printed  form,  sent  around  to 
them  by  the  gentlemen  representing  the  government  of  the  United  States 
in  these  legal  controversies.  They  signed  them  as  a  matter  of  form. 
And  I  want  to  say  to  you  here  today  from  not  only  the  experience  that  it 
has  been  my  privilege  to  have  in  an  investigatorial  way  with  these  gentle- 
men, but  from  the  comments  and  observations  of  those  that  they  would  not 
exchange  the  power  that  the  executives  of  the  railroads  may  have  over 
their  lives  for  power  expressed  through  the  supreme  court  of  the  United 
States.  They  have  reasons  for  doing  that.  They  are  arguing  that  the 
judges  of  the  supreme  court  have  not  been  educated  along  industrial  or 
economic  lines.  If  their  lives  are  to  be  controlled  they  will  take  their 
chances  with  those  men,  many  of  whom  grew  up  side  by  side  with  them  in 
the  railroad  industry.  They  point  to  the  fact  that  it  took  the  supreme 
court  ten  years  to  come  to  the  point  of  view,  that  they  have  reversed 
decisions  to  come  to  that  view,  that  it  was  in  the  purview  of  legislation  to 


88  THE  CENTRAL  STATES  CONFERENCE 

great  president,  W'oodrow  Wilson,  earnestly  desires  and  as  every  business 
man  should  desire,  there  will  be  an  end  to  improper  legislation  directed 
at  commerce  and  industry.  Constructive,  reasonable,  broad-minded  laws 
will  replace  the  narrow  ill-timed,  often  vicious  legislation  of  a  day  when 
only  politicians  framed  the  laws.      (Applause.) 

May  I  read  one  paragraph  from  our  program: 

"The  Evansville  Plan  contemplates  finding  the  real  solution  of  tran.s- 
portation  problems  in  ascertaining  the  concensus  of  business  opinion  by 
means  of  regional  meetings,  which  business  men  can  and  will  attend. 
Tliese  (onferences  nuist  be  repre,sentative  of  every  angle  of  the  question, 
an<l  in  their  breadth  and  scope  attract  the  best  thought  of  the  nation." 

I  think  you  will  admit  we  have  attracted  some  of  the  best  thought 
of  the  nation  here.      (Applause.) 

A  new  Mark  Twain  story  is  cast  in  the  setting  of  Hartford,  Conn.,  in 
the  days  when  the  great  humorist  lived  there  and  had  as  a  fellow  resident 
Mrs.  Harriet  Beecher  Stowe.  One  winter's  morning,  following  an  un- 
precedented snow  storm,  akin  perhaps  to  the  one  we  have  just  had,  which 
almost  house-bound  the  population  of  Hartford,  Twain  was  observed 
struggling  through  the  drifts,  fighting  hard  to  make  headway,  but  vigor- 
ously puffing  at  a  short  cob  pipe.  He  carried  a  large  wooden  shovel  and 
an  iron  spade.  Asked  by  a  neighbor  whither  he  was  bound  Twain  an- 
swered: 

"I've  just  had  a  note  from  Mrs.  Stowe  saying  her  husband  is  under 
the  weather.      I'm  going  around  to  dig  him  out."      (Laughter.) 

The  snow  fall  under  which  the  shippers  and  the  public,  the  railroads 
and  the  investors  find  themselves  is  unprecedently  deep.  The  difficulties 
that  beset  them  are  enormous. 

We  have  here  as  the  last  speaker  on  our  set  program  a  man  who 
ought  to  be  able  to  dig  out  some  truths  for  the  shippers  and  the  public. 
He  is  a  traffic  expert  and  is  regarded  as  one  of  the  best  qualified-  men  in 
the  United  States  to  present  the  view  of  the  shipper. 

I  have  the  pleasure  of  introducing  Mr.  J.  M.  Belleville,  the  traffic 
manager  of  the  Pittsburg  Plate  Glass  Company,  who  will  talk  to  us  on 
"Mutual  Interests  of  Shippers  and  Railways  in  the  Transportation  Prob- 
lem."    (Applause.) 


THE  CENTRAL  STATES  CONFERENCE  89 

Mutual  Interests  of  Shippers  and  Railways 
in  Transportation. 

By  Mr.  J.  M.  Belleville, 

Traffic  Manager  of  the  Pittsbuigh  Plate  Glass  Company. 

Mr.  Chairman,  ladies  and  gentlemen:  I  am  afraid  our  friend  Murphy 
has  gotten  himself  into  some  trouble  by  making  the  comments  that  he  has 
about  me  being  an  expert  and  going  to  give  you  a  treat.  I  fancy  that  after 
I  have  talked  you  will  see  that  instead  of  the  kind  words  that  he  said  he 
should  have  remarked  that  this  afternoon  last  of  all  came  Belleville. 

I  feel,  Mr.  Chairman  and  gentlemen,  that  I  owe  an  apology  for  pre- 
suming to  come  here  in  answer  to  Mr.  Murphy's  very  cordial  and  pressing 
invitation,  knowing  as  I  did  know  how  little  opportunity  there  was  for 
preparation.  I  had  that  feeling  grow  upon  me  and  become  strongly  en- 
trenched in  me  as  I  sat  here  yesterday  and  today  listening  to  the  very  elo- 
quent and  comprehensive  and  enlightening  addresses,  addresses  that  de- 
note very,  very  great  thought.  I  agreed  to  come,  however.  I  didn't  agree 
to  come  so  much  for  what  I  could  give  to  you  as  for  what  I  could  get 
from  you. 

The  older  I  get,  the  more  that  I  study  these  great  problems  of  trans- 
portation, the  less  I  feel  that  I  know  and  I  always  find  in  these  confer- 
ences where  both  sides  are  presented  and  presented  forcibly  and  as  com- 
prehensively as  they  have  been  today  and  yesterday  that  I  have  always 
learned  something  that  is  of  value  and  I  expect  to  keep  on  going  to  that 
school,  which  is  the  best  school  after  all,  as  long  as  I  am  able  to  keep  upon 
my  feet. 

I  began  to  think,  however,  this  morning,  or  rather  yesterday  morning 
when  Mr.  Thom  was  talking  and  later  when  Mr.  Walsh  was  speaking  that 
possibly  my  alleged  brains  were  not  working  just  right.  I  didn't,  as  those 
gentlemen  did,  read  the  address  of  Mr.  Thorn's  and  Mr.  Leigh's  and  Mr. 
Muier's  in  the  morning  newspapers,  but  I  heard  them,  and  I  must  confess 
that  I  could  not  find  anything  in  those  addresses  that  indicated  they  con- 
demned governmental  regulation.  Of  course,  we  all  know  that  the  rail- 
road men  of  the  old  school  who  were  brought  up  to  believe  the  railroads 
were  private  property  did  resent  anything  like  regulation  and  despised  it. 
Ho,  for  that  matter,  did  the  shippers.  But  I  think  all  up-to-date  railroad 
executives  and  railroad  managers  of  today  fully  recognize  that  regulation 
has  come,  and  that  it  has  come  to  stay,  and  that  proper  regulation  is  a 
good  thing  and  does  a  good  work. 

I  think  we  all  want  to  remember,  however,  that  the  men  who  passed 
the  regulatory  acts  were  men,  and  that  the  men  who  were  administering 
the  acts  also  were  men;  and  we  also  want  to  remember  that  human  na- 
ture is  prone  to  err.  Possibly  there  may  be  some  mistakes  in  the  law 
itself  that  need  correction.  Possibly  there  are  some  mistakes  in  the  ad- 
ministration of  it  which  need  changing,  but  I  believe  that  will  all  come 
about. 

I  wish  upon  this  occasion  that  I  were  an  orator  and  that  I  possessed 
the  command  of  language  of  the  chief  magistrate  of  this  country  and  that 
I  were  gifted  with  the  rugged  eloquence  and  forcefulness  of  our  former 
President  Roosevelt,  that  I  might  drive  home  to  you  forcibly  the  very 
grave  condition  of  the  transportation  problem  as  I  view  it,  and  impress 
upon  you  forcibly  the  crying  need  of  the  hour  for  serious  thought  and 
forceful  attention. 

These  are  very  troublous  times  and  it  behooves  all  good  citizens,  and 
especially  all  live  business  men,  to  want  to  heed  and  emulate  the  railroad 


90  THE  CENTRAL  STATES  CONFERENCE 

warning  with  which  we  are  all  so  familiar — "Stop!  Look!  Listen!"  We 
are  enjoying  now  a  period  of  the  very  greatest  prosperity  this  country  has 
ever  known  and  one  for  which  our  transportation  facilities  have  proven 
absolutely  inadequate  to  meet  the  necessities  of  the  public  as  they  exist 
today,  to' say  nothing  of  meeting  that  increase  which  is  so  sure  to  come. 
It  is  idle  for  us  who  are  on  the  shipping  side  to  condemn  the  railroads 
of  bad  management,  to  say  that  they  ought  to  have  foreseen  the  boom  in 
business  and  prepared  for  it.  The  late  James  J.  Hill,  with  a  prophetic 
vision,  nearly  twenty-five  years  ago,  astounded  the  business  world  with 
the  magnitude  of  the  sums  which  he  estimated  it  would  be  necessary  for 
the  railroad  systems  of  the  country  to  spend  in  the  next  five  years  in  im- 
proving their  facilities.  The  results  have  proven  his  estimates  to  have 
been  correct,  underestimated  rather  than  overestimated. 

It  is  equally  idle  for  us  to  say  that  but  for  the  stock-jobbing  schemes 
and  graft  on  the  railroads  they  would  have  been  able  to  meet  the  necessi- 
ties of  the  times.  That  is  water  which  has  gone  over  the  dam,  and  the 
facts  regarding  those  transactions  are  only  valuable  to  guard  against  the 
repetition  or  recurrence  of  them.  It  is  a  condition  which  now  confronts 
us  and  not  in  any  sense  a  theory,  a  condition  Avhich  we  must  admit  that 
the  shippers  as  well  as  the  carriers  are  responsible  for,  a  condition  such 
as  this  country  has  never  before  known,  a  condition  calling  for  the  serious 
thoughts  of  the  very  best  minds  of  the  business  world,  that  we  may  solve 
the  problems  of  the  hour,  a  condition  which  above  all  else  calls  in  very 
loudest  terms  for  co-operation. 

A  demand  for  efficiency  has  swept  over  the  country  during  the  past 
few  years  and  has  pervaded  every  line  of  business  enterprise.  Real  up- 
to-date  efficiency  in  my  humble  opinion  is  absolutely  impossible  without 
real  up-to-date  co-operation,  and  especially  is  this  true  in  connection  with 
the  transportation  problem.  You,  gentlemen,  probably  all  are  familiar, 
many  of  you,  and  certainly  all  the  ladies,  somewhat  familiar  with  Holy 
Writ,  and  you  know  that  St.  Paul,  in  his  letters  to  the  early  churches, 
gave  a  great  deal  of  fatherly  advice.  I  can't  say  that  I  agree  with  all  of 
the  advice  given  in  those  letters.  For  instance,  his  injunction  to  Timothy 
to  take  a  little  wine  for  his  stomach's  sake  and  his  oft  infirmities,  wouldn't 
do  for  everyone  to  put  into  effect.  I  do  heartily  agree,  however,  with  his 
advice  given  in  his  letter  to  the  Philippians.  Lest  you  may  question  my 
knowledge  of  Holy  Writ,  I  will  give  you  the  chapter  and  verse.  It  is  the 
fourth  verse  of  the  second  chapter  of  Philippians.  I  want  to  commend  the 
advice  given  in  that  text  to  every  interest  that  is  represented  here,  rail- 
roads, manufacturers,  shippers,  laborers  and  law-making  bodies.  The 
text  reads:  "Look  not  every  man  upon  his  own  thing  but  every  man  also 
upon  the  things  of  others."  Which  is  only  another  way  of  stating  the 
golden  rule,  which  rule  a  man  said  has  been  more  honored  in  the  breach 
than  in  the  observance.  May  I  say  that  if  in  the  past  there  had  been 
more  looking  on  the  things  of  others,  both  by  the  carriers  and  by  the 
shippers,  there  would  not  have  been  a  need  for  so  many  rigid  laws.  How- 
ever, that  again  is  water  which  has  passed  over  the  dam.  A  consideration 
of  our  mistakes  is  only  valuable  if  we  use  them  to  prevent  a  repetition 
of  the  same  kind  of  trouble. 

Today,  the  manufacturers,  shippers,  farmers  and  merchants  of  the 
country  are  offering  to  the  railroads  a  volume  of  tonnage  which  is  the 
largest  the  country's  history  has  ever  known,  and  the  transportation  car- 
riers' resources  are  absolutely  inadequate  to  meet  the  condition  and  de- 
mand. Practically  all  of  our  railroads  are  short  of  power,  short  of  cars, 
short  of  trackage,  short  of  labor,  possibly  I  should  say  short  of  money, 
although  that  seems  to  be  a  very  debatable  point.  I  don't  believe  they  are 
all  short  of  credit.  In  this  situation  what  do  we  find?  The  shippers  and 
the  manufacturers  are  blaming  the  railroads.  The  railroads  are  blaming 
the  shippers.  Each  interest  looking  on  their  own  things  and  not  on  the 
thines  of  others. 


THE  CENTRAL  STATES  CONFERENCE  91 

Now,  what  is  the  remedy  for  the  situation?  More  law?  More  regula- 
tory enactment?  Possibly  we  may  need  something  of  ihat  kind,  but,  as  I 
view  it,  the  one  weapon  that  is  ready  to  our  hands  is  co-operation,  and  that 
without  consistent,  intelligent  co-operation  we  shall  never  get  out  of  the 
present  quagmire  but  will  be  permanently  engulfed.  We  need  co-opera- 
tion on  the'  railroads,  one  with  the  other,  and  in  that  regard  we  need 
co-operation  in  each  railroad  of  the  different  departments.  A  good  deal 
of  this  trouble  in  this  distribution  comes  from  a  lack  of  thorough  co-opera- 
tion between  the  various  departments  of  the  railroads.  Then  we  need  co- 
operation between  the  shippers  and  the  railroads,  and  to  make  co-opera- 
tion effective  it  is  necessary  that  each  look  upon  the  things  of  others. 

You  will  pardon  me  when  I  speak  of  co-operation  if  I  refer  to  a  per- 
sonal experience  of  a  few  years  ago,  I  do  so  merely  to  illustrate  the  point. 
I  referred  to  the  prophecy  of  the  late  James  J.  Hill  for  the  needs  of  large 
expenditures  on  the  part  of  the  railroads.  The  officers  of  the  American- 
Railway  Association,  being  very  much  impressed  with  Mr.  Hill's  views, 
together  with  their  knowledge  that  the  transportation  system  as  it  ex- 
isted, issued  a  bulletin  a  little  over  four  years  ago  called  their  bulletin 
number  10,  in  which  they  set  forth  at  length  the  condition  of  the 
railroads,  their  needs,  their  revenues,  and  showed  the  enormous  expendi- 
tures that  they  would  have  to  meet,  and  expressed  the  view  that  the  rail- 
roads' borrowing  power  would  not  enable  them  to  borrow  sufficient  funds 
to  meet  that  emergency.  The  president  of  the  corporation  which  I  serve 
was  very  much  impressed  with  the  figures  set  forth  and  the  statements 
made  in  this  bulletin.  He  asked  me  if  I  had  any  means  of  verifying  the 
correctness  of  those  statements.  At  that  time  I  happened  to  be  presi- 
dent of  tne  National  Industrial  Traffic  League,  and  I  wrote  a  letter  to  the 
presidents  of  some  twenty  railroads  asking  them  their  opinion  in  the  first 
place  of  the  correctness  of  the  figures  given  in  that  bulletin  number  10 
and  in  the  second  place  if  the  figures  were  correct,  what  about  the  ability 
of  the  railroads  to  provide  necessary  funds,  at  the  same  time  expressing 
the  desire  of  our  organization  for  co-operation. 

I  received  replies  to  all  but  two  of  these  letters  and  they  were  ex- 
tremely interesting  and  I  regard  them  as  a  very  valuable  file  in  my  office. 

One  of  these  letters,  however,  was  from  a  president  of  a  large  trunk 
line,  a  man  of  large  and  varied  experience  in  every  department  of  railroad 
service.  After  commenting  fully  upon  the  bulletin  and  expressing  his  opin- 
ion as  to  the  inability  of  the  railroads  to  raise  the  necessary  funds,  sadly 
expressing  the  belief  that  government  ownership  was  the  only  outcome 
and  concluded  his  letter  with  these  words:  While  my  views  on  this  sub- 
ject are  no  secret,  and  I  frequently  express  them  in  public,  I  have  never 
before  so  fully  put  them  upon  paper.  I  do  so  now  because  you  represent  a 
class  whose  business  it  is  to  get  all  you  can  out  of  the  railroads  without 
any  regard  for  anything  except  the  temporary  advantage  for  your  em- 
ployers." May  I  quote  very  briefly  from  my  reply:  "The  very  drastic 
measures  which  have  been  adopted  in  the  past  few  years  would,  in  my 
opinion,  never  have  been  placd  upon  the  statute  books  if  there  had  been 
proper  co-operation  and  if  the  railroads  and  shippers  had  each  exercised 
a  proper  regard  for  the  rights  of  each  other.  Futhermore,  I  do  not  be- 
lieve that  the  attitude  of  the  commission  towards  railroads,  of  which  you 
naturally  complain,  would  have  ever  come  about  had  it  not  been  for  the 
utter  contempt  of  the  commission  by  both  railroads  and  the  shippers  in 
the  earlier  years  of  the  commission's  existence.  I  do  not  at  all  regard 
the  situation  as  hopeless,  even  now,  nor  can  I  for  a  moment  believe  that 
government  ownership  of  the  railroads  is  the  only  possible  outcome  of  the 
present  situation.  I  do  most  firmly  believe  that  the  only  solution  of  the 
problem,  which  is  unquestionably  a  very  serious  one,  is  co-operation  be- 
tween the  railroads,  a  campaign  of  education.  Our  organization  has  been 
doing  good  work  along  these  lines  during  the  last  four  years,  and  we  stand 
ready  now  to  join  with  the  railroads  in  co-operative  work  of  the  broadest 


94  THE  CENTRAL  STATES  CONFERENCE 

regard.  Look  into  this  question  carefully  and  if  your  neighbors  are  not 
doing  their  full  duty  in  this  regard,  get  after  them. 

In-*his  connection  I  want  to  read  a  letter.  It  will  not  take  but  a  few 
moments.  The  hour  is  late,  but  I  hope  I  am  not  unnecessarily  detaining 
you.  I  think  this  will  be  of  particular  interest  to  the  railroads  and  ship- 
pers. 

This  letter  is  from  Mr.  W.  L.  Clause,  of  our  company,  and  is  addressed 
to  the  President  of  the  Merchants  and  Manufacturers  Association  in  reply 
to  an  invitation  to  a  meeting  which  they  had  in  Baltimore,  a  conference 
to  discuss  this  Newlands  joint  committee  on  Interstate  Commerce.  He 
declined  the  invitation  to  attend  the  meeting  and  then  said: 

"While  I  still  recognize  that  there  are  still  many  evils  to  be  cor- 
rected, I  am  beginning  to  wonder  whether  we  are  not  approaching  the 
time  when  we  are  in  danger  of  going  too  far  in  our  endeavor  to  exercise 
control  over  our  railroads.  Is  it  not  time  to  take  cognizance  of  the  fact 
that  the  Interstate  Commerce  Commission  is  not  the  only  power  exer- 
cising control?  Most  of  the  gentlemen  gathered  at  Baltimore  will  be 
business-men.  How  many  of  them  would  want  to  start  in  business  if  the 
rates  of  wages  and  the  conditions  of  employment  were  so  controlled  that 
the  cost  of  their  output  was  largely  a  matter  outside  of  their  control  and 
if  at  the  same  time  the  prices  at  which  they  could  sell  their  commodities 
was  a  matter  in  which  they  had  little  or  no  voice?  How  many  of  them  do 
you  think  would  care  to  remain  in  business,  and  in  case  they  could  not 
get  out,  how  many  of  them  do  you  think  would  feel  very  much  Interested 
in  improving  or  extending  its  facilities?  Certainly,  under  such  conditions, 
no  one  not  already  actually  in  business  would  care  to  start  any  new  enter- 
prise. 

"To  what  extent  is  the  present  lamentable  break-down  in  our  trans- 
portation facilities  due  to  the  underlying  causes  above  referred  to?  I 
don't  suppose  anybody  knows  very  definitely  to  what  extent  that  may  be 
the  case,  but  isn't  there  probability  enough  of  their  being  an  intimate  re- 
lation between  the  present  inadequate  condition  of  the  equipment  of  our 
railroads,  and  the  fact  that  the  officers  of  our  railroads  are  no  longer 
in  control  of  our  transportation  facilities  to  any  very  marked  extent,  to 
make  us  pause  and  perhaps  look  at  this  problem  from  a  somewhat  dif- 
ferent standpoint.  That  the  railroads  themselves  are  largely  to  blame 
for  the  necessity  of  exercising  some  measure  of  control  cannot  be  denied, 
but  as  all  movements  in  public  sentiment  and  in  reform  swing  too  far,  and 
have  to  recede,  are  we  now  rapidly  approaching  the  time  when  the  swing 
of  the  pendulum  in  this  movement  should  be  checked? 

"It  may  throw  some  light  on  the  present  status  of  those  problems  if 
we  very  briefly  review  the  early  history  of  our  railroad  building.  Very 
few  of  our  railroads  were  profitable  investments  when  they  were  first 
constructed.  The  resources  of  the  country  through  which  they  passed 
were  undeveloped,  the  revenues  in  most  cases  were  insufficient  to  pay  for 
the  upkeep  of  the  roads,  and  equipment,  and  provide  interest  for  the  bonds 
and  most  of  them  went  through  bankruptcy  and  had  long  periods  of  lean 
years  before  they  ultimately  reached  the  point  where  they  could  pay  even 
5  per  cent  or  6  per  cent  on  what  would  have  been  a  fair  valuation  of 
their  assets.  Of  course,  the  investors  had  hopes  of  very  handsome  returns. 
Or  they  never  would  have  built  the  roads.  To  be  sure,  the  public  had  just 
ground  for  grievance  against  some  of  them  because  of  the  stock-jobbing 
schemes  that  were  employed  and  because  of  many  of  the  methods  of  dis- 
crimination that  were  followed,  but  just  the  same,  had  it  been  known  in 
advance  that  no  larger  returns  would  ever  be  made,  and  that  ultimately, 
even  if  they  could  be  made,  would  not  be  permitted  because  of  government 
regulation,  most  of  our  railroads  would  never  have  been  built  by  private 
enterprise.  Could  any  group  of  men  today  be  induced  to  build  a  trunk  line 
railroad   for  the  purpose  of  competing  with  those   already  in  existence. 


THE  CENTRAL  STATES  CONFERENCE  95 

Avith  all  the  risk  of  losing  their  money,  knowing  that,  from  the  beginning, 
at  best  they  would  have  a  long  period  of  unprofitable  operation,  until  the 
natural  resources  along  their  line  should  be  developed,  and  knowing  from 
the  beginning  that  in  no  event  would  they  be  permitted  to  earn  more 
than  a  mere  five  percent  or  six  percent  on  their  investment? 

"With  a  knowledge  of  those  facts  before  us,  does  anyone  suppose 
that  if  the  conditions  now  imposed  had  ahvays  existed,  our  railroads 
would  ever  have  been  built  by  private  enterprise?  Is  it  not,  therefore,  a 
matter  of  great  good  fortune  to  the  country  that  our  railroads  were  built 
before  these  restrictive  conditions  were  imposed? 

"If  the  conclusions  above  reached  are  measurably  correct,  do  they 
not  also  apply,  although  in  a  somewhat  lesser  degree,  to  the  problems 
involved  in  increasing  the  facilities  and  equipment  to  meet  the  ever-in- 
creasing necessities  of  the  public?  How  far  is  the  present  shortage  of 
cars  and  equipment  due  to  this  condition?  If  our  railroads  are  deprived 
of  the  opportunities  to  make  money  enough  to  enable  them  to  provide 
additional  trackage  and  equipment  sufficient  to  meet  the  growing  de- 
mands of  our  country,  how  are  these  necessities  to  be  provided  for,  and 
how  is  our  country  to  continue  its  development?  We  all  decry  government 
ownership,  but  are  we  not  in  danger  of  creating  conditions  that  will  force 
it  upon  ourselves?  We  know  something  of  how  the  red  tape,  politics,  in- 
efficiency and  increased  cost  of  operation  resulting  from  government  own- 
ership would  ultimately  affect  rates,  and  the  service  rendered,  but  even 
more  serious  would  be  the  fact  that  government-owned  railroads  would 
always  lag  behind  necessity.  Needs  for  additional  trackage,  terminals  and 
equipment  would  never  be  anticipated.  We  all  know  that  it  is  hard 
enough  and  many  times  impossible,  to  get  Congress  to  do  a  thing,  even 
after  the  necessity  for  it  has  been  long  apparent.  Hence,  our  railroads 
would  never  be  ready  for  a  great  business  movement  when  it  came.  The 
ills  we  now  have  are  as  nothing  compared  with  those  we  would  have 
under  government  ownership.  It  is  time  to  be  careful." 

I  gave  some  "don'ts"  for  the  shippers.  I  want  to  be  perfectly  fair 
and  give  some  "don'ts"  to  the  railroads. 

To  the  railroads  I  would  say,  don't  sit  calmly  down  and  say  the  blame 
for  the  present  condition  is  all  v^ith  the  shipper  and  receiver  of  freight, 
that  if  they  would  do  their  duty  there  would  be  no  congestion  and  no 
shortage.  Look  on  the  other  fellow's  side  a  little  and  you  may  find  not 
only  that  the  shippers  are  not  so  black  as  you  have  painted  them,  but 
you  may  even  discover  that  you  are  not  so  perfect  as  you  thought  you 
were  and  that  you  can  make  further  improvement  in  your  service.  Above 
all,  quit  fighting  the  improvement  of  waterways  and  don't  endeavor  to 
drive  the  waterways  out  of  business.  Water  carriers  of  heavy  tonnage 
are  imperatively  needed  in  this  country  and  it  is  bound  to  increase  in 
volume.  You  are  certain  to  share  from  this  increase  and  from  the  benefits 
that  are  to  come,  from  the  increased  tonnage  carried  by  water  if  the  in- 
land system  of  transportation  is  improved. 

I  thank  you.   (Applause) 

Mr.  Samuel  L.  Orr:  In  the  absence  of  Mr.  Murphy,  who  was  called 
out,  I  want  to  take  this  opportunity  of  thanking  Mr.  Belleville  for  his  very 
able  address.     We  will  stand  adjourned. 


96  THE  CENTRAL  STATES  CONFERENCE 


FRIDAY  EARNING  SESSION. 
December  15,  1916. 

Vendome  Hotel,  Evansville,  Ind. 
Banquet. 

Mr.  J.   R.  A.   Hobson  presided  as  Toastmaster. 
Toastmaster:      The    Chairman   of   the    Resolutions    Committee   is   now 
prepared  to  present  resolutions. 

Hon.  Benjamin  Bosse:  Mr.  Toastmaster,  ladies  and  gentlemen,  and 
delegates  to  this  conference:  The  Committee  on  Resolutions  reports  the 
following  resolutions: 

We,  of  the  Central  States  Conference  on  Rail  and  Water  Transpor- 
tation, representing  business  interests  of  Indiana,  Illinois,  Kentucky,  Ohio, 
Tennessee  and  Missouri,  in  session  at  Evansville,  Ind.,  recognize  that 
the  transportation  facilities  of  the  country  during  recent  years  have  not 
kept  pace  with  the  growth  and  expansion  of  commerce.  Present  facilities 
are  inadequate  and  bid  fair  to  prove  even  more  so  in  the  near  future 
unless  conditions  are  remedied. 

Therefore,  Be  It  Resolved  by  this  body  in  conference  assembled: 

1.  That  in  view  of  the  manifest  need  for  constantly  increasing 
transportation  facilities  to  meet  the  rapidly  growing  commercial  needs 
of  the  country,  we  favor  constructive  action  by  Congress  at  this  session 
upon  this  subject. 

2.  We  urge  that  steps  be  taken  to  give  substantial  assurance  to 
investors  of  the  safety  and  earning  power  of  their  funds  invested  in  rail- 
road securities,  thus  attracting  new  capital  to  further  railroad  expansion. 

3.  We  favor  exclusive  federal  supervision  of  the  issuance  of  securi- 
ties by  the  carriers  of  interstate  commerce. 

4.  We  favor  the  federal  incorporation  of  the  carriers  of  interstate 
commerce. 

5.  We  favor  the  enlargement  of  the  Interstate  Commerce  Commis- 
sion with  a  division  of  the  duties  in  order  to  avoid  conflicting  functions  of 
detection,  prosecution  and  adjudication. 

6.  We  favor  federal  regulation  of  railroad  rates,  authority  to  be 
vested  with  the  Interstate  Commerce  Commission  with  regional  sub- 
commissions  sitting  in  various  traffic  districts  and  that  this  regulation 
follow  the  natural  lines  of  commerce  and  not  the  artificial  lines  of  states. 

7.  We  favor  the  maintenance  of  State  Public  Utility  Commissions 
and  we  urge  that  such  state  supervision  be  standardized  and  the  regula- 
tions as  far  as  practicable  be  made  uniform  as  between  the  various  states 
of  the  union. 

8.  The  sentiment  of  this  Conference  is  against  government  owner- 
ship, but  in  favor  of  a  sound  and  efficient  basis  of  government  regula- 
tion, beneficial  alike  to  the  common  carriers,  to  the  shippers  and  to  the 
public.  We  urge  constructive  action  on  the  part  of  those  in  authority  that 
will  safeguard  the  interests  of  investors  and  will  also  bring  to  the  ship- 
pers and  to  the  public  the  furnishing  of  additional  equipment,  the  build- 
ing of  better  terminals,  additional  double  track  and  new  mileage  where 
needed,  and,  in  consequence,  the  greater  development  of  the  commercial 
life  of  the  nation. 

9.  We  enthusiastically  advocate  the  improvement  of  our  ports  and 
inland  waterways  and  waterway  terminals  as  an  important  subsidiary 
part  of  our  transportation  system. 

10.  We  recommend  that  business-men  throughout  the  country  as- 
semble in  regional  meetings  such  as  this  to  discuss  and  digest  the  trans- 


THE  CENTRAL  STATES  CONFERENCE  97 

portation  problem  and  other  vital  national  questions  as  they  may  arise, 
having  all  sides  of  these  questions  presented  by  high  authorities  represent- 
ing every  phase  of  the  subject."   (Applause) 

Mr.  Toastmaster,  on  behalf  of  the  Committee  on  Resolutions,  I  offer 
a  motion  that  these  resolutions  be  adopted  as  read. 

The  motion  was  seconded  from  all  over  the  house. 

The  Toastmaster:  The  motion  is  made  and  seconded  that  these  reso- 
lutions be  adopted  as  read.   Is  there  any  discussion? 

Mr.  W.  H.  McCurdy:  I  would  like  to  have  the  second  and  third 
paragraphs  read  again. 

Mr.  Lawrence  Finn  (Kentucky):  Mr.  Chairman. 

Mr.  W.  H.  McCurdy:     I  yield  to  Mr.  Finn. 

The  Toastmaster:      Mr.  Finn  of  Kentucky,  has  the  floor. 

Mr.  Lawrence  Finn:  Mr.  Toastmaster.  I  understand,  sir,  that  the 
program  will  include  conversations  over  the  telephone  from  the  various 
portions  of  this  nation  at  stated  intervals  and  that  that  time  is  now  almost 
at  hand.  I  desire,  sir,  to  present  to  this  audience  and  to  this  assembly  some 
facts,  which  according  to  my  notion,  are  very  urgent.  I  do  not  speak  with- 
out authority.  For  nine  years  I  have  been  chairman  of  the  Commission,  a 
member  of  the  Commission  of  the  State  of  Kentucky,  and  for  six  years 
I  have  been  its  chairman.  I  want  to  state  to  this  assemblage,  furthermore, 
that  there  is  an  organization  in  the  United  States  which  is  composed  of 
all  the  railroad  commissions  of  this  nation — 

The  Toastmaster:     If  the  gentlemen  will  permit  me  to  interrupt  him. 

Mr.  Lawrence  Finn:  This  Commission  is  composed  of  the  state  com- 
missions and  the  Canadian  commissions,  and  I  want  to  state  further  that 
in  that  organization  I  have  had  the  honor  of  being  chairman  of  the  Com- 
mittee on  State  and  Federal  Regulation.  I  have  had  the  honor  of  being 
Chairman  of  its  Executive  Committee. 

The  Toastmaster:     If  the  gentlemen  will  allow  me — 

Mr.  Lawrence  Finn:  I  have  been  vice-president  and  president  of  that 
organization.   (Applause) 

The  Toastmaster:  If  the  gentleman  will  allow  me  to  interrupt  him 
for  just  one  moment — It  is  not  purposed  that  these  resolutions  be  passed 
at  this  time.  We  simply  wanted  to  read  the  resolutions  and  if  there  is  any 
debate  on  them  an  opportunity  will  be  afforded  before  the  resolutions  are 
offered  for  passage. 

Mr.  Lawrence  Finn:  That  is  all  I  want,  Mr.  Toastmaster. 

The  Toastmaster:  If  the  gentleman  will  allow  me  to  interrupt  him, 
I  will  call  upon  him  first  when  the  resolutions  come  up  for  consideration. 

Mr.  Lawrence  Finn:     Thank  you. 

The  Toastmaster:  We  wish  to  give  an  opportunity  for  their  consid- 
eration in  the  meantime. 

Ladies  and  gentlemen,  it  is  now  necessary  that  we  proceed  very 
rapidly  with  our  program  and  we  will  consider  the  resolutions  after  the 
program  is  completed  and  after  this  telephone  demonstration  has  been 
ended.  In  order  to  expedite  the  program  and  to  leave  ample  time  for  the 
consideration  of  these  resolutions  the  program  will  be  changed  in  this 
particular.  I  am  going  to  introduce  the  last  speaker  on  the  program  now, 
and  we  will  start  the  telephone  demonstration  on  the  minute  as  scheduled. 

It  is  now  my  pleasure,  ladies  and  gentlemen,  to  introduce  to  you  one 
of  the  authorities  on  the  subject  which  we  have  been  discussing  in  our 
conferences,  a  gentleman  who  was  born  in  Missouri,  who  has  lived  a  num- 
ber of  years  in  Texas,  and  who  has  lived  a  larger  number  of  years  in  Colo- 
rado, who  is,  therefore,  from  the  West  and  from  the  South  and  from  the 
Middle  West  and  who  is  of  New  York,  but  from  Missouri,  Mr.  Frank 
Trumbull.   (Applause) 


94  THE  CENTRAL  STATES  CONFERENCE 

regard.  Look  into  this  question  carefully  and  if  your  neighbors  are  not 
doing  their  full  duty  in  this  regard,  get  after  them. 

Inothis  connection  I  want  to  read  a  letter.  It  will  not  take  but  a  few 
moments.  The  hour  is  late,  but  I  hope  I  am  not  unnecessarily  detaining 
you.  I  think  this  will  be  of  particular  interest  to  the  railroads  and  ship- 
pers. 

This  letter  is  from  Mr.  W.  L.  Clause,  of  our  company,  and  is  addressed 
to  the  President  of  the  Merchants  and  Manufacturers  Association  in  reply 
to  an  invitation  to  a  meeting  which  they  had  in  Baltimore,  a  conference 
to  discuss  this  Newlands  joint  committee  on  Interstate  Commerce.  He 
declined  the  invitation  to  attend  the  meeting  and  then  said: 

"While  I  still  recognize  that  there  are  still  many  evils  to  be  cor- 
rected, I  am  beginning  to  wonder  whether  we  are  not  approaching  the 
time  when  we  are  in  danger  of  going  too  far  in  our  endeavor  to  exercise 
control  over  our  railroads.  Is  it  not  time  to  take  cognizance  of  the  fact 
that  the  Interstate  Commerce  Commission  is  not  the  only  power  exer- 
cising control?  Most  of  the  gentlemen  gathered  at  Baltimore  Avill  be 
business-men.  How  many  of  them  Avould  want  to  start  in  business  if  the 
rates  of  wages  and  the  conditions  of  employment  were  so  controlled  that 
the  cost  of  their  output  was  largely  a  matter  outside  of  their  control  and 
if  at  the  same  time  the  prices  at  which  they  could  sell  their  commodities 
was  a  matter  in  which  they  had  little  or  no  voice?  How  many  of  them  do 
you  think  would  care  to  remain  in  business,  and  in  case  they  could  not 
get  out,  how  many  of  them  do  you  think  would  feel  very  much  interested 
In  improving  or  extending  its  facilities?  Certainly,  under  such  conditions, 
no  one  not  already  actually  in  business  would  care  to  start  any  new  enter- 
prise. 

"To  what  extent  is  the  present  lamentable  break-down  in  our  trans- 
portation facilities  due  to  the  underlying  causes  above  referred  to?  I 
don't  suppose  anybody  knows  very  definitely  to  what  extent  that  may  be 
the  case,  but  isn't  there  probability  enough  of  their  being  an  intimate  re- 
lation between  the  present  inadequate  condition  of  the  equipment  of  our 
railroads,  and  the  fact  that  the  officers  of  our  railroads  are  no  longer 
in  control  of  our  transportation  facilities  to  any  very  marked  extent,  to 
make  us  pause  and  perhaps  look  at  this  problem  from  a  somewhat  dif- 
ferent standpoint.  That  the  railroads  themselves  are  largely  to  blame 
for  the  necessity  of  exercising  some  measure  of  control  cannot  be  denied, 
but  as  all  movements  in  public  sentiment  and  in  reform  swing  too  far,  and 
have  to  recede,  are  we  now  rapidly  approaching  the  time  when  the  swing 
of  the  pendulum  in  this  movement  should  be  checked? 

"It  may  throw  some  light  on  the  present  status  of  those  problems  if 
we  very  briefly  review  the  early  history  of  our  railroad  building.  Very 
few  of  our  railroads  were  profitable  investments  when  they  were  first 
constructed.  The  resources  of  the  country  through  which  they  passed 
were  undeveloped,  the  revenues  in  most  cases  were  insufficient  to  pay  for 
the  upkeep  of  the  roads,  and  equipment,  and  provide  interest  for  the  bonds 
and  most  of  them  went  through  bankruptcy  and  had  long  periods  of  lean 
years  before  they  ultimately  reached  the  point  where  they  could  pay  even 
5  per  cent  or  fi  per  cent  on  what  would  have  been  a  fair  valuation  of 
their  assets.  Of  course,  the  investors  had  hopes  of  very  handsome  returns. 
Or  they  never  would  have  built  the  roads.  To  be  sure,  the  public  had  just 
ground  for  grievance  against  some  of  them  because  of  the  stock-jobbing 
schemes  that  were  employed  and  because  of  many  of  the  methods  of  dis- 
crimination that  were  followed,  but  just  the  same,  had  it  been  known  in 
advance  that  no  larger  returns  would  ever  be  made,  and  that  ultimately, 
even  if  they  could  be  made,  would  not  be  permitted  because  of  government 
regulation,  most  of  our  railroads  would  never  have  been  built  by  private 
enterprise.  Could  any  group  of  men  today  be  induced  to  build  a  trunk  line 
railroad   for  the  purpose  of  competing  with  those  already  in  existence, 


THE  CENTRAL  STATES  CONFERENCE  95 

-with  all  the  risk  of  losing  their  money,  knowing  that,  from  the  beginning, 
at  best  they  would  have  a  long  period  of  unprofitable  operation,  until  the 
natural  resources  along  their  line  should  be  developed,  and  knowing  from 
the  beginning  that  in  no  event  would  they  be  permitted  to  earn  more 
than  a  mere  five  percent  or  six  percent  on  their  investment? 

"With  a  knowledge  of  those  facts  before  us,  does  anyone  suppose 
that  if  the  conditions  now  imposed  had  always  existed,  our  railroads 
would  ever  have  been  built  by  private  enterprise?  Is  it  not,  therefore,  a 
matter  of  great  good  fortune  to  the  country  that  our  railroads  were  built 
before  these  restrictive  conditions  were  imposed? 

"If  the  conclusions  above  reached  are  measurably  correct,  do  they 
not  also  apply,  although  in  a  somewhat  lesser  degree,  to  the  problems 
involved  in  increasing  the  facilities  and  equipment  to  meet  the  ever-in- 
ci-easing  necessities  of  the  public?  How  far  is  the  present  shortage  of 
cars  and  equipment  due  to  this  condition?  If  our  railroads  are  deprived 
of  the  opportunities  to  make  money  enough  to  enable  them  to  provide 
additional  trackage  and  equipment  sufficient  to  meet  the  growing  de- 
mands of  our  country,  how  are  these  necessities  to  be  provided  for,  and 
how  is  our  country  to  continue  its  development?  We  all  decry  government 
ownership,  but  are  we  not  in  danger  of  creating  conditions  that  will  force 
it  upon  ourselves?  We  know  something  of  how  the  red  tape,  politics,  in- 
efficiency and  increased  cost  of  operation  resulting  from  government  own- 
ership would  ultimately  affect  rates,  and  the  service  rendered,  but  even 
more  serious  would  be  the  fact  that  government-owned  railroads  would 
always  lag  behind  necessity.  Needs  for  additional  trackage,  terminals  and 
equipment  would  never  be  anticipated.  We  all  know  that  it  is  hard 
enough  and  many  times  impossible,  to  get  Congress  to  do  a  thing,  even 
after  the  necessity  for  it  has  been  long  apparent.  Hence,  our  railroads 
would  never  be  ready  for  a  great  business  movement  when  it  came.  The 
ills  we  now  have  are  as  nothing  compared  with  those  we  would  have 
under  government  ownership.  It  Is  time  to  be  careful." 

I  gave  some  "don'ts"  for  the  shippers.  I  want  to  be  perfectly  fair 
and  give  some  "don'ts"  to  the  railroads. 

To  the  railroads  I  would  say,  don't  sit  calmly  down  and  say  the  blame 
for  the  present  condition  is  all  with  the  shipper  and  receiver  of  freight, 
that  if  they  would  do  their  duty  there  would  be  no  congestion  and  no 
shortage.  Look  on  the  other  fellow's  side  a  little  and  you  may  find  not 
only  that  the  shippers  are  not  so  black  as  you  have  painted  them,  but 
you  may  even  discover  that  you  are  not  so  perfect  as  you  thought  you 
were  and  that  you  can  make  further  improvement  in  your  service.  Above 
all,  quit  fighting  the  improvement  of  waterways  and  don't  endeavor  to 
drive  the  waterways  out  of  business.  Water  carriers  of  heavy  tonnage 
are  imperatively  needed  in  this  country  and  it  is  bound  to  increa.se  in 
volume.  You  are  certain  to  share  from  this  increase  and  from  the  benefits 
that  are  to  come,  from  the  increased  tonnage  carried  by  water  if  the  in- 
land system  of  transportation  is  improved. 

I  thank  you.    (Applause) 
Mr.  Samuel  L.  Orr:      In  the  absence  of  Mr.  Murphy,  who  was  called 
out,  I  want  to  take  this  opportunity  of  thanking  Mr.  Belleville  for  his  very 
able  address.     We  will  stand  adjourned. 


96  THE  CENTRAL  STATES  CONFERENCE 


FKIDAY  EVENING  SESSION. 
December  15,  1916. 

Vendome  Hotel,  Evansville,  Ind. 
Banquet. 

Mr.  J.   R.  A.   Hobson  presided  as  Toastmaster. 
Toastmaster:      The    Chairman   of   the    Resolutions    Committee    is   now- 
prepared  to  present  resolutions. 

Hon.  Benjamin  Bosse:  Mr.  Toastmaster,  ladies  and  gentlemen,  and 
delegates  to  this  conference:  The  Committee  on  Resolutions  reports  the 
following  resolutions: 

We,  of  the  Central  States  Conference  on  Rail  and  Water  Transpor- 
tation, representing  business  interests  of  Indiana,  Illinois,  Kentucky,  Ohio, 
Tennessee  and  Missouri,  in  session  at  Evansville,  Ind.,  recognize  that 
the  transportation  facilities  of  the  country  during  recent  years  have  not 
kept  pace  with  the  growth  and  expansion  of  commerce.  Present  facilities 
are  inadequate  and  bid  fair  to  prove  even  more  so  in  the  near  future 
unless  conditions  are  remedied. 

Therefore,  Be  It  Resolved  by  this  body  in  conference  assembled: 

1.  That  in  view  of  the  manifest  need  for  constantly  increasing 
transportation  facilities  to  meet  the  rapidly  growing  commercial  needs 
of  the  country,  we  favor  constructive  action  by  Congress  at  this  session 
upon  this  subject. 

2.  We  urge  that  steps  be  taken  to  give  substantial  assurance  to 
investors  of  the  safety  and  earning  power  of  their  funds  invested  in  rail- 
road securities,  thus  attracting  new  capital  to  further  railroad  expansion. 

3.  We  favor  exclusive  federal  supervision  of  the  issuance  of  securi- 
ties by  the  carriers  of  interstate  commerce. 

4.  We  favor  the  federal  incorporation  of  the  carriers  of  interstate 
commerce. 

5.  We  favor  the  enlargement  of  the  Interstate  Commerce  Commis- 
sion with  a  division  of  the  duties  in  order  to  avoid  conflicting  functions  of 
detection,  prosecution  and  adjudication. 

6.  We  favor  federal  regulation  of  railroad  rates,  authority  to  be 
vested  with  the  Interstate  Commerce  Commission  with  regional  sub- 
commissions  sitting  in  various  traffic  districts  and  that  this  regulation 
follow  the  natural  lines  of  commerce  and  not  the  artificial  lines  of  states. 

7.  We  favor  the  maintenance  of  State  Public  Utility  Commissions 
and  we  urge  that  such  state  supervision  be  standardized  and  the  regula- 
tions as  far  as  practicable  be  made  uniform  as  between  the  various  states 
of  the  union. 

8.  The  sentiment  of  this  Conference  is  against  government  owner- 
ship, but  in  favor  of  a  sound  and  efficient  basis  of  government  regula- 
tion, beneficial  alike  to  the  common  carriers,  to  the  shippers  and  to  the 
public.  We  urge  constructive  action  on  the  part  of  those  in  authority  that 
will  safeguard  the  interests  of  investors  and  will  also  bring  to  the  ship- 
pers and  to  the  public  the  furnishing  of  additional  equipment,  the  build- 
ing of  better  terminals,  additional  double  track  and  new  mileage  where 
needed,  and.  in  consequence,  the  greater  development  of  the  commercial 
life  of  the  nation. 

0.  We  enthusiastically  advocate  the  improvement  of  our  ports  and 
inland  waterways  and  waterway  terminals  as  an  important  subsidiary 
part  of  our  transportation  system. 

10.  We  recommend  that  business-men  throughout  the  country  as- 
semble in  regional  meetings  such  as  this  to  discuss  and  digest  the  trans- 


THE  CENTRAL  STATES  CONFERENCE  97 

portation  problem  and  other  vital  national  questions  as  they  may  arise, 
having  all  sides  of  these  questions  presented  by  high  authorities  represem- 
ing  every  phase  of  the  subject."   (Applause) 

Mr.  Toastniaster,  on  behalf  of  the  Committee  on  Resolutions,  I  offer 
a  motion  that  these  resolutions  be  adopted  as  read. 

The  motion  was  seconded  from  all  over  the  house. 

The  Toastniaster:  The  motion  is  made  and  seconded  that  these  reso- 
lutions be  adopted  as  read.   Is  there  any  discussion? 

Mr.  W.  H.  McCurdy:  I  would  like  to  have  the  second  and  third 
paragraphs  read  again. 

Mr.  Lawrence  Finn  (Kentucky):  Mr.  Chairman. 

Mr.  W.  H.  McCurdy:     I  yield  to  Mr.  Finn. 

The  Toastmaster:      Mr.  Finn  of  Kentucky,  has  the  floor. 

Mr.  Lawrence  Finn:  Mr.  Toastmaster.  I  understand,  sir,  that  the 
program  will  include  conversations  over  the  telephone  from  the  various 
portions  of  this  nation  at  stated  Intervals  and  that  that  time  is  now  almost 
at  hand.  I  desire,  sir,  to  present  to  this  audience  and  to  this  assembly  some 
facts,  which  according  to  my  notion,  are  very  urgent.  I  do  not  speak  with- 
out authority.  For  nine  years  I  have  been  chairman  of  the  Commission,  a 
member  of  the  Commission  of  the  State  of  Kentucky,  and  for  six  years 
I  have  been  its  chairman.  I  want  to  state  to  this  assemblage,  furthermore, 
that  there  is  an  organization  in  the  United  States  which  is  composed  of 
all  the  railroad  commissions  of  this  nation — 

The  Toastmaster:     If  the  gentlemen  will  permit  me  to  interrupt  him. 

Mr  Lawrence  Finn:  This  Commission  is  composed  of  the  state  com- 
missions and  the  Canadian  commissions,  and  I  want  to  state  further  that 
in  that  organization  I  have  had  the  honor  of  being  chairman  of  the  Com- 
mittee on  State  and  Federal  Regulation.  I  have  had  the  honor  of  being 
Chairman  of  its  Executive  Committee. 

The  Toastmaster:     If  the  gentlemen  will  allow  me — 

Mr.  Lawrence  Finn:  I  have  been  vice-president  and  president  of  that 
organization.   (Applause) 

The  Toastmaster:  If  the  gentleman  will  allow  me  to  interrupt  him 
for  just  one  moment— It  is  not  purposed  that  these  resolutions  be  passed 
at  this  time  We  simply  wanted  to  read  the  resolutions  and  if  there  is  any 
debate  on  them  an  opportunity  will  be  afforded  before  the  resolutions  are 
offered  for  passage. 

Mr.  Lawrence  Finn:  That  is  all  I  want,  Mr.  Toastmaster. 

The  Toastmaster:  If  the  gentleman  will  allow  me  to  interrupt  him. 
I  will  call  upon  him  first  when  the  resolutions  come  up  for  consideration. 

Mr.  Lawrence  Finn:     Thank  you. 

The  Toastmaster:  We  wish  to  give  an  opportunity  for  their  consid- 
eration in  the  meantime. 

Ladies  and  gentlemen,  it  is  now  necessary  that  we  proceed  very 
rapidly  with  our  program  and  we  will  consider  the  resolutions  after  the 
program  is  completed  and  after  this  telephone  demonstration  has  been 
ended.  In  order  to  expedite  the  program  and  to  leave  ample  time  for  the 
consideration  of  these  resolutions  the  program  will  be  changed  in  this 
particular.  I  am  going  to  introduce  the  last  speaker  on  the  program  now, 
and  we  will  start  the  telephone  demonstration  on  the  minute  as  scheduled. 

It  is  now  my  pleasure,  ladies  and  gentlemen,  to  introduce  to  you  one 
of  the  authorities  on  the  subject  which  we  have  been  discussing  in  our 
conferences,  a  gentleman  who  was  born  in  Missouri,  who  has  lived  a  num- 
ber of  years  in  Texas,  and  who  has  lived  a  larger  number  of  years  in  Colo- 
rado who  is,  therefore,  from  the  West  and  from  the  South  and  from  the 
Middle  West  and  who  is  of  New  York,  but  from  Missouri.  Mr.  Frank 
Trumbull.   (Applause) 


98  THE  CENTRAL  STATES  CONFERENCE 


The  American  Railways. 

By  Mr.  Frank  TiaunbuU. 

Cliairman   of   the    Railway   Executives'    Advisory    Committee   on   F"'ederal 

Legislation. 

Mr.  Toastmaster,  ladies  and  gentlemen,  I  believe  the  subject  as- 
signed to  me  this  evening  is  The  American  Railways.  You  will  agree  at 
once,  I  am  sure,  that  this  is  a  very  large  topic.  The  railroads  of  the  United 
States  have  250,000  miles  of  main  line.  They  are  capitalized  at  about 
seventeen  thousand  millions  of  dollars.  Notwithstanding  what  you  hear 
about  watered  stock  or  about  individual  caprices  of  single  roads,  we  stand 
firmly  on  the  proposition  that  the  railroads  of  the  United  States  as  a  whole 
are  worthy  of  their  capitalization,  all  they  are  capitalized  for,  and  more 
too.  (Applause)  They  are  the  lowest  capitalized  railroads  in  the  world, 
notwithstanding  the  high  costs  in  this  country.  They  furnish  the  lowest 
rates  and  they  pay  the  highest  wages.  Whatever  may  be  said  about  indi- 
vidual transgressions  here  and  there,  the  railroads  of  the  United  States 
are  a  tribute  to  the  private  energy  and  daring  of  Americans.   (Applause) 

There  have  been  practices  in  the  past  which  speakers  are  quite  fond 
of  adverting  to.  They  are  not  right,  practices  of  both  railroads  and  ship- 
pers, but  many  of  them — most  of  them  have  been  cured,  shippers  and 
railroads  alike.  Today,  the  railroad  business  of  America  is  as  honest  as 
any  business.  There  has  been  a  tremendous  improvement  in  the  last  ten, 
twenty  years  in  commercial  integrity  and  the  railroads  have  shared  in 
that  movement. 

Now,  there  is  one  thing  that  differentiates  the  railroads  from  other 
industries.  You  know  what  it  is,  but  most  of  us  do  not  stop  to  think  of 
it  when  we  are  considering  these  questions,  and  that  is  that  the  railroads 
are  under  minute  regulation.  I  mention  that  in  the  beginning  because  it 
colors  the  consideration  of  the  whole  subject. 

I  can  give  you  no  better  illustratioii  perhaps  than  the  steel  business. 
The  United  States  steel  corporation  has  increased  the  wages  of  its  men 
33  per  cent  in  eleven  months,  but  their  prices  are  not  limited  as  railroad 
rates  are  limited.  They  have  put  up  the  price  of  steel  rails  $10.00  a  ton 
and  railroads  must  have  steel  rails.  It  would  not  be  safe  for  you  to  leave 
here  on  a  railroad  if  they  quit  buying  steel  rails. 

The  profits  of  American  railroads  in  this,  the  most  prosperous  year  of 
their  history,  the  net  earnings  after  deducting  expenses,  taxes,  repair 
of  equipment  and  rentals,  were  less  than  six  per  cent  on  the  seventeen 
million  dollars  which  I  mentioned,  and  railroads,  like  other  people,  have 
to  compete  for  capital.  The  last  year  one  company  alone,  one  private  com- 
pany, not  under  regulation,  the  Ford  Motor  Company,  of  Detroit,  earned 
$60,000,000  profit,  3,000  per  cent  on  its  capital  stock.  One  company  alone 
earned  one  seventeenth  of  the  profits  of  the  American  railroads,  excluding 
the  smaller  lines. 

The  Bethlehem  Steel  Company,  its  president  told  me  the  other  night, 
earned   $60,000,000. 

Now,  this  is  the  point  I  want  to  get  before  you  tonight.  This  limita- 
tion, this  artificial  limitation  upon  railroad  profits,  makes  it  difficult  to 
deal  with  this  question  and  various  other  questions;  and  in  saying  that 
I  am  not  at  all  finding  fault  with  regulations.  The  railroads  of  this  coun- 
try accept  the  principle  of  regulation;  but  the  railroads  ask  that  it  be 
made  unified  and  consistent.  Regulation,  like  railroad  management,  should 


THE  CENTRAL  STATES  CONFERENCE  99 

be  honest,  and  both  of  them  should  be  more  than  honest:  They  should  be 
competent. 

Now,  I  had  the  great  pleasure  this  afternoon  of  hearing  my  friends, 
Mr  W  G  Lee  and  Mr.  Walsh,  make  very  interesting  statements  to  this 
conference.  I  had  thought  that  I  might  tell  you  something  of  the  history 
of  the  so-called  eight-hour  act,  but  Mr.  Lee  made  such  a  splendid  state- 
ment of  it  that  I  need  not  take  up  your  time.  I  only  want  to  say  one  or  two 
things,  not  at  all  in  any  controversial  spirit,  but  merely  as  a  matter  of 
accuracy  of  the  record,  and  because  my  host  has  said  that  they  want  to 
hear  both  sides  of  everything. 

In  the  first  place,  Mr.  Lee  made  a  statement  which  I  am  sure  he 
thought  was  true,  that  the  railroads  spent  three-quarters  of  a  million  dol- 
lars purchasing  space  in  the  newspapers  and  buying  editorials.  I  know  Mr. 
Lee  thought  that  or  he  would  not  have  said  it.  He  said  that  they  made  a 
contract  with  one  concern  for  three-quarters  of  a  million  dollars.  The  fact 
is  that  the  highest  contract  made  was  not  over  one  hundred  thousand 
dollars,  and  the  total  cost  was  only  about  three  hundred  thousand  dollars. 

Now,  as  has  been  said  to  us,  time  and  again,  "you  railroads  make  a 
mistake  in  not  getting  your  case  before  the  people.  You  ought  to  take  the 
public  into  your  confidence.  You  are  public  servants.  It  is  your  duty  to 
get  your  facts  before  the  public,  to  tell  them  what  the  facts  are,  so  that 
they  may  deal  intelligently  with  you."  And  we  felt  it  was  perfectly 
straightforward  and  consistent  to  purchase  space  in  the  newspapers  and 
tell  the  story,  first  because  we  think  the  public  wants  us  to  do  it  and, 
second,  because  we  do  not  want  anything  from  a  newspaper  man  for 
nothing;  and  I  leave  it  to  Mr.  Murphy  whether  any  railroad  man  can  pur- 
chase editorial  space  in  any  newspaper  in  the  country  of  any  note. 

Mr.  Henry  C.  Murphy:  I  am  glad  to  answer  that  point.  I  wish  to 
correct  Mr.  Lee,  or  submit  my  idea.  At  the  time  I  think  he  inadvertently 
erred  in  saying  that  newspaper  editorials  can  be  bought.  I  doubt  if  there 
is  a  newspaper  of  any  standing  in  the  United  States  that  would  sell  its 
editorial  space.   (Applause) 

Mr.  W.  G.  Lee:  May  I  interrupt  just  for  a  moment,  with  the  speak- 
er's permission? 

Mr.  Frank  Trumbull:     Certainly. 

Mr.  W.  G.  Lee:  I  hold  in  my  office  copies  of  letters  sent  out  by  the 
publicity  department  of  the  railroads,  typewritten,  or  printed,  all  ad- 
dressed to  the  editors,  which  says:  "We  have  placed  with  your  com- 
pany through  our  publicity  department,  certain  advertisements  telling  our 
side  of  this  controversy.  We  would  like  to  have  you  write  editorials  com- 
menting on  your  viewpoint  of  that  statement  and  send  us  marked  copy." 
Now,  gentlemen,  my  understanding  is  that  if  I  bought  space  from  a  news- 
paper and  then  sent  it  a  letter  and  asked  it  to  write  an  editorial  on  my 
advertisement,  that  I  would  naturally  look  for  it  to  do  so  in  my  favor. 
(Applause) 

Mr.  Henry  C.  Murphy:  Mr.  Trumbull,  if  you  please,  I  just  want  to 
say  one  word  in  answer  to  that.  If  Mr.  Lee  will  give  me  the  name  of  that 
paper,  I  guarantee  that  the  name  of  that  paper  will  be  branded  in  the 
American  Newspaper  Publishers  Association  as  a  pariah.   (Applause) 

,Mr.  W.  G.  Lee:  I  will  send  you  the  printed  copy,  Mr.  Murphy.  I 
will  send  you  the  printed  copy,  and  I  presume  that  it  went  to  every  news- 
paper in  the  United  States  where  their  advertisements  were  published. 

Mr.  Henry  C.  Murphy:  We  are  performing  a  public  service  then  if 
we  expose  those  papers. 

Mr.  W.  G.  Lee:     Exactly,  exactly. 


100 


THE  CENTRAL  STATES  CONFERENCE 


Mr.  Lawrence  Finn:  Mr,  Toastmaster,  I  hold  in  my  hand  the  ac- 
count of  Clifford  Thome's  address — 

The  Toastmaster:  If  the  gentlemen  will  pardon  me,  Mr.  Trumbull 
has  been  invited  to  make  a  talk  to  the  banquet  as  assembled  here  this 
evening  We  haven't  the  time  for  debate  at  this  time  and  we  propose  to 
give  you  all  the  opportunity  to  say  whatever  you  please  after  the  program 
is  completed. 

Mr.  W.  G.  Lee:  Mr.  Toastmaster,  I  humbly  beg  the  pardon  of  Mr. 
Trumbull,  and  we  are  such  good  friends  that  I  know  he  will  accept  it. 
I  will  not  interrupt  him  again. 

Mr.  Henry  C.  Murphy:     Neither  will  I. 

Mr.  Frank  Trumbull:  I  would  like  to  ask  Mr.  Murphy  as  an  editor 
what  answer  he  would  make  to  that  letter.  I  know  what  answer  I  would 
make. 

Now,  Mr.  Lee  said  that  they  would  not  arbitrate  because  seventy-five 
railroads' were  not  included.  There  were  more  railroads  than  that  that 
were  not  included,  but  there  was  no  way  of  coercing  them  in.  This  is  a 
voluntary  arrangement  between  the  railroads. 

Another  thing  he  did  not  mention,  which  was  most  important,  was 
that  within  three  days  after  they  got  to  Washingon  the  National  Con- 
ference Committee  of  Managers  offered  ta  the  President  of  the  United 
States  to  leave  the  whole  thing  to  a  commission  to  be  appointed  by  him, 
thereby  putting  the  railroads  of  this  country  unreservedly  in  the  hands 
of  the  government.   (Applause) 

Now,  I  might  say  other  things.  It  is  evident  that  this  Adamson  law 
does  not  suit  anybody.  (Laughter  and  applause)  The  brotherhoods  have 
had  a  look-in  on  regulation.  They  have  been  invited  to  sit  down  to  the 
banquet  and  they  do  not  like  the  first  course. 

Mr.  Lawrence  Finn:      Who  don't? 

Mr.  Frank  Trumbull:  The  brotherhoods.  It  does  not  look  good  to 
them.  It  does  not  look  good  to  anybody.  Because  when  they  start  in  on 
the  regulation  of  wages  they  know  it  is  a  long  road.  If  they  can  compel 
the  increase  or  decrease  of  wages  they  can  apply  it  to  all  employes  of  rail- 
roads. 

Mr.  W.  G.  Lee:     Exactly,  president  and  all. 

Mr.  Frank  Trumbull:      President  and  all. 

Mr.  W.  G.  Lee:      That's  it. 

Mr.  Frank  Trumbull:  Their  situation  at  the  moment  and  ours  re- 
mind me  of  the  Episcopal  clergyman  who  tried  to  start  a  colored  Episco- 
pal church  down  South.  He  got  the  school  house  full  of  niggers  and  at  the 
right  moment  came  out  from  behind  the  curtain  clad  in  his  Episcopal 
robe,  and  one  of  the  negroes  said  to  another  negro  sitting  next  to  him, 
"What  do  you  reckon  he  is  doin'  now?"  The  other  negro  said,  "I  don't 
know.     It  looks  to  me  like  Klu-Klux."     (Laughter  and  applause) 

Now,  Mr.  Walsh  said  this  afternoon,  and  I  have  known  Mr.  Walsh 
longer  than  I  have  known  most  people  here,  that  no  intelligent  man  ought 
ever  to  consider  a  railroad  a  private  enterprise.  He  criticised  that  part 
of  Mr.  Thom's  statement  yesterday.  All  I  say  is,  whether  they  ought  or 
ought  not  to  have  done  so.  they  did  consider  them  private  enterprises. 
What  he  says  and  what  I  say  is  simply  equivalent  to  saying  that  we  are 
more  intelligent  than  our  fathers  and  grandfathers  were,  and  we  ought 


THE  CENTRAL  STATES  CONFERENCE  101 

to  be  because  this  imperial  magician,  the  telephone,  has  brought  us  al- 
together, a  hundred  million  people.  "The  world  do  move."  Our  point  of 
view  is  different  from  that  of  our  fathers  and  grandfathers  in  many  par- 
ticulars. 

He  talked  about  the  railroads  fighting  legislation.  He  comes  from 
the  state,  and  I  was  born  in  the  state  in  which  by  referendum  the  people 
fought  legislation  which  had  been  enacted.  I  refer  to  the  full-crew  law, 
so-called.  The  legislators  enacted  this.  The  railroads  did  oppose  it  as 
they  ought  to  have  done  in  the  interest  of  the  investors  and  in  your 
interest.  It  went  to  the  people,  and  the  people  beat  it  by  164,000  majority. 
So  that  all  legislation  is  not  right,  simply  because  it  is  legislation. 

We  have  heard  about  the  eight-hour  law.  I  will  simply  mention  two 
illustrations.  The  railway  postal  clerks  are  not  limited  to  16  hours  even, 
as  men  in  train  service  are.  Only  two  years  ago  Oregon,  California  and 
Washington  defeated  eight-hour  propositions.  But  we  need  not  argue 
that  This  Adamson  law  is  not  an  eight-hour  law.  Nobody  pretends  it  is. 
There  is  not  a  line  in  it  that  limits  men  to  working  eight  hours  a  day. 
The  crucial  point  has  not  been  mentioned  in  this  debate  here;  that  is, 
not  whether  men  should  have  their  pay  based  upon  eight  hours  but  what 
shall  you  pay  for  it,  a  direct  question.  Remember  what  I  said  to  you  in 
the  beginning,  that  railroads  are  under  limitations  and  have  other  con- 
cerns. They  must  sit  down  and  consider  where  an  increase  of  pay,  which 
was  all  this  was,  is  taking  them  and  is  taking  you.  Therefore,  they  had  to 
consider,  not  only  in  their  interests,  as  operating  the  roads,  but  in  the  in- 
terests of  the  investors,  whether  you  like  it  or  not,  whether  you  believe  in 
it  or  not,  as  the  final  remedy  for  this  transportation  question.  The  rail- 
roads of  this  country  are  dependent  upon  private  investors. 

We  hear  about  servitude.  Involuntary  servitude  of  labor.  You  can't 
have  involuntary  servitude  of  capital.  There  is  not  a  man  in  this  room 
will  put  his  money  into  something  he  don't  want  to  put  it  in.  So  long  as 
you  are  dependent  upon  private  capital,  you  must  consider,  regulation 
must  consider,  the  officials  and  directors  of  railroads  must  consider  what 
every  increase  in  cost  is  going  to  do  to  them. 

Next  we  had  to  consider  our  duty  to  you  as  employers  of  labor.  We 
had  to  consider  our  duty  to  you  as  shippers.  We  didn't  believe  that  an 
increase  in  wages  ought  to  be  granted  to  any  body  of  men  without  in- 
vestigation. We  can't  get  our  rates  increased  without  investigation.  You 
don't  want  us  to.  If  we  believed  that,  how  could  we  look  you  in  the  face 
and  go  to  the  commission  in  Washington  and  ask  for  an  increase  in  rates 
for  you  to  pay  for  something  that  we  ourselves  were  not  willing  to  cer- 
tify to  as  absolutely  right?  We  had  besides  a  duty  to  1,400,000  men.  They 
are  human  beings  just  like  these  trainmen  are.  The  man  who  walks  the 
track  at  night  in  sleet  and  snow  and  rain,  to  protect  you  on  the  trains 
and  protect  these  passengers  is  a  human  being.  We  can't  do,  because  of 
your  limitation  on  us,  all  we  would  like  to  do  for  these  men,  but  if  eight 
hours  is  right  for  a  day's  work  and  the  pay  must  be  increased  regardless 
of  investigation,  why  shouldn't  it  apply  to  1,400,000  other  human  beings? 

We  hear  about  human  rights  in  your  talks,  as  rightfully  we  should. 
We  pay  more  attention  to  human  rights.  We  are  realizing  that  we  are  all 
paying  more  and  more  attention  to  human  rights.  We  are  realizing  that  we 
are  all  knit  together  in  one  bunch.  But  no  scheme  of  regulation  is  fair, 
consistent  or  adequate  that  leaves  out  of  consideration  part  of  the  facts. 
So  that  if  I  may,  I  want  to  lead  this  whole  thing  into  a  broader  field. 

After  all,  this  wage  question  is  only  a  part  of  a  great  problem.  The 
great  problem  for  you  and  for  a  hundred  million  people  is  not  what  should 
be  done  with  the  Adamson  law,  but  what  is  going  to  happen  to  your 
transportation  facilities.  This  ^Adamson  law  will  be  disposed  of  some  way 


102  THE  CENTRAL  STATES  CONFERENCE 

or  other,  but  vour  necessities  will  remain.  The  business  of  this  country 
is  growing  by  "leaps  and  bounds,  and  we  are  now  up  against  an  economic 
readjustment  that  will  jostle  the  whole  world.  We  can't  afford  to  lose  an 
ounce.  We  must  make  every  stroke  count,  and  anything  that  is  wasteful 
must  be  cut  out.  The  most  important  thing  to  you  is  an  expansion  of  your 
facilities.  Last  year  a  thousand  miles  of  new  roads  in  three  million  square 
miles  of  territory.  What  does  that  mean?  You  may  argue  all  you  please 
about  the  increase  in  the  number  of  investors  in  this  country,  but  the 
fact  is  that  money  has  been  going  into  other  things.  You  have  been  put- 
ting money  into  other  things.  Why?  Because  you  can  make  more  money. 

Therefore,  the  broad  question  is,  not  a  wage  question,  not  what  the 
state  of  Iowa  may  do,  or  the  state  of  Kentucky,  or  the  state  of  Texas,  or 
the  state  of  Virginia,  the  broad  question  is  what  will  best  serve  a  hundred 
million  people  who  speak  one  language,  whose  interests  are  national  and 
not  local,  and,  if  I  may  just  say  one  more  word — the  toastmaster  wants 
me  to  suspend — this  Evansville  Plan  is  going  to  take  root  and  grow.  That 
is,  the  regional  discussion  of  these  things.  (Applause)  But  the  solution  of 
this  transportation  problem  is  not  going  to  be  limited  by  state  lines.  There 
is  not  a  man  in  this  room  that  is  Avilling  to  limit  his  commerce,  hjs  com- 
mercial opportunities  to  the  state  lines  of  Indiana.  It  is  going  to  be  settled 
regionally  and  the  system  ^vill  be  imiform.  Take  for  instance,  if  you  have 
government  o^vnership  it  will  have  to  be  by  the  federal  government,  of 
course.  Then  what  becomes  of  your  state  lines?  We  believe  that  if  the 
government  can  take  over  the  railroads  successfully,  they  can  regulate 
them  successfully,  and  they  should  keep  the  regulation  close  to  the  peo- 
ple and  keep  it  close  in  regional  ways,  just  as  the  Evansville  Plan  con- 
templates. 

I  thank  you.  (Applause) 


The  Toastmaster:  Through  the  courtesy  of  the  American  Telephone 
&  Telegraph  Company,  not  a  regional  institution,  I  believe  you  will  be 
very  much  entertained  and  interested  in  a  very  few  minutes.  I  have  the 
honor  to  introduce  the  vice-president  of  the  American  Telephone  &  Tele- 
graph Company,  Mr.  N.  C.  Kingsbury,  of  New  York.    (Applause) 


THE  CENTRAL  STATES  CONFERENCE 


103 


a 


Co-Operation" 


By  X.  C.  Kingsbury, 
Vice-President  of  the  American  Telephone  and  Telegraph  Company. 


N.  C.  Kingsbury  of  New  York,  vice- 
president  of  the  long  distance  lines  of 
the  Bell  system,  officially  known  as  the 
American  Telephone  and-  Telegraph 
company,  spoke  on  "Co-operation"  as 
follows: 

If  you  and  I  could  trace  our  ances- 
tral trees  back  through  the  ages  to 
dim  prehistoric  times,  we  should 
doubtless  all  find  a  common  ancestor. 
For  the  sake  of  our  personal  feelings, 
I  shall  not  presume  to  go  as  far  back 
as  Mr.  Darwin  leads  us,  but  I  do  want 
to  call  your  attention  to  some  of  the 
circumstances  surrounding  the  life  of 
our  prehistoric  ancestor.  He  probably 
lived  somewhere  in  Europe  or  Mes- 
opotamia, and  recent  studies  of  arch- 
eologists  have  revealed  the  fact,  for  in- 
stance, that  a  race  of  human  beings 
inhabited  caves  along  some  of  the 
rivers  in  France  for  a  period  extending 
over  something  like  fifty  thousand 
years. 

Let  us  glance  for  a  moment  at  a 
scene  which  must  have  been  enacted 
millions  of  times  in  the  rude  habita- 
tions of  the  prehistoric  man.  We  will 
assume  it  is  late  afternoon  and  that 
our  ancestor  has  been  successful  in 
the  chase.  He  has  flesh  to  eat,  per- 
haps also  a  few  nuts  and  herbs  and 
berries  which  he  has  gathered  in  the 
vicinity  of  his  cave.  He  has  killed 
the  game,  dragged  it  to  his  cave, 
dressed  it,  and  now  sits  crouching  over 
the  fire  roasting  the  meat  on  the 
pointed  end  of  a  stick.  It  is  all  his; 
the  entire  benefit  belongs  to  him  alone. 
and  he  is  going  to  enjoy  that  meal 
just  as  much  as  you  and  I  will  enjoy 
the  elaborate  banquet  of  which  we  are 
to  partake. 

Let  us  look  for  a  moment  at  another 
scene,  more  familiar  to  us  all — the 
average  American  family  seated  at  a 
table  in  the  average  American  home, 
about  to  partake  of  the  average  Amer- 
ican meal.  There  is  the  table  covered 
with  the  white  cloth,  the  utensils  made 
from  porcelain,  steel,  glass  and  silver, 
and  there  is  the  food — bread  and  but- 
ter, milk,  tea  or  coffee,  salt  and  pep- 
per, sugar,  meat,  vegetables,  fruit,  etc. 
— and  scarcely  anything  which  I  have 
mentioned  is  the  direct  result  of  the 
labor  of  any  person  who  sits  about 
that  table. 

These  two  pictures  present  an  anti- 
thesis, in  that  they  illustrate  the  dif- 
ference between  the  condition  of  man 


having  no  co-operation  with  others  of 
his  race,  and  the  condition  of  man  fa- 
miliar to  us  all,  where  co-operation 
does   exist. 

Our  prehistoric  friend  has  for  him- 
self all  the  profit  arising  from  his  own 
acts.  No  ranchman  out  west  raised 
the  animal  from  which  he  makes  his 
meal;  no  railway  company  derived  a 
profit  in  transporting  that  animal;  no 
packer  reaped  a  profit  in  preparing 
the  animal  for  his  use,  and  no  middle- 
man took  another  profit  in  selling  him 
the  necessities  of  his  meal.  He  did  it 
all;  the  profit  was  all  his;  he  was  ab- 
solutely independent.  What  a  bliss- 
ful  existence  his   must  have  been! 

Now,  if  there  is  a  man  here  who  con- 
siders himself  independent,  I  should 
like  to  follow  this  train  of  thought  a 
little  further  and  ask  him  a  few  ques- 
tions. When  you  sit  down  to  a  meal, 
did  you  ever  think  who  provided  it? 
Why,  you  don't  even  know,  in  most 
cases,  where  the  different  components 
of  that  meal  came  from!  Did  the  salt 
and  the  pepper  drop  as  manna  from 
heaven?  Did  the  flax  or  the  cotton 
which  forms  the  table  cloth  grow  upon 
the  home  place?  Were  the  fibres 
spun  into  yarn  by  the  housewife,  and 
was  the  cloth  woven  on  the  house- 
hold loom?  Did  the  man  about  to  par- 
take of  the  meal  rear  the  animal  which 
supplies  the  meat  for  the  repast?  Who 
delved  into  the  earth  for  the  silver,  the 
steel,  the  lead,  the  clay,  which  have 
been  used  to  make  up  the  utensils 
necessary  for  our  most  simple  meal? 
Did  the  fruit  come  from  the  home 
orchard?  Are  the  milk  and  butter  the 
products  of  the  family  cow?  And  did 
the  hired  man  go  out  before  dinner 
and  gather  the  various  vegetables  from 
the  garden?  No  thoughtful  man  can 
consider  such  questions  without  being 
impressed  with  the  utter  dependence 
of  even  the  most  independent  man  in 
our  present  civilization  upon  hundreds 
of  thousands  of  his  fellow-men  whom 
he  has  never  met  or  never  heard  of, 
all  engaged  in  some  occupation  dif- 
ferent from  his  own  and  scattered 
about  not  only  all  over  his  own  coun- 
try but  many  of  them  located  in  far 
distant   parts    of   the    earth! 

It  makes  no  difference  what  voca- 
tion a  man  follows.  He  may  be  a 
farmer,  and  cause  two  blades  of  grass 
to  grow  where  only  one  grew  before. 
He   may   be    a   manufacturer,    a    mer- 


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THE  CENTRAL  STATES  CONFERENCE 


105 


will  remain  a  permanent,  lasting,  real 
benefit.  When  such  a  thing  is  tried 
between  individuals  or  firms  or  cor- 
porations, unfair  competitive  condi- 
tions develop.  When  it  is  tried  be- 
tween classes  we  witness  industrial 
disputes,  strikes,  even  civil  war.  When 
it  is  tried  between  nations,  sooner  or 
later  international  war  destroys  a  gen- 
eration of  men  as  it  is  doing  in  Eu- 
rope now. 

It  sometimes  seems  as  though  even 
with  all  the  facilities  for  transporta- 
tion and  communication  which  exist  in 
this  country  we  still  have  a  tendency 
to  mistrust  each  other,  to  fail  to  co- 
operate, to  drift  apart.  I  hear  people 
in  the  middle  West  and  in  the  far 
West  and  in  other  parts  of  the  coun- 
try, continually,  say  slighting  things 
of  New  York,  and  I  hear  people  in 
New  York  say  slighting  things  of  other 
parts  of  the  county.  Such  feelings 
should  not  exist,  such  remarks  should 
not  be  made.  If  there  is  one  thing 
clear  to  me  it  is  that  New  York  needs 
this  great  western  country  behind  it 
and  that  it  could  not  exist  for  one  day 
as  New  York  alone,  and  it  is  equally 
clear  that  the  relation  which  New 
York  bears  to  the  rest  of  the  country 
is  just  as  important,  just  as  neces- 
sary. 

The  men  who  adopted  the  motto  of 
the  United  States  made  popular  a 
Latin  phrase  which  expresses  vastly 
more  than  the  idea  that  the  United 
States  is  made  up  of  the  union  of 
many  states.  "E  Pluribus  Unum"  has 
a  much  broader  application  than  the 
narrow  political  one. 

Now.  one  of  the  great  results  of  this 
necessary  cooperation,  this  interde- 
pendence which  we  have  been  consid- 
ering, is  the  fact  that  we  have  all  be- 
come specialists  along  one  line  or  an- 
other. There  has  been  during  the  past 
ages  a  gradual  evolution  in  the  direc- 
tion of  specialization.  Just  as  soon 
as  one  man  produced  more  of  a  com- 
modity than  he  and  his  dependents 
could  consume  and  the  surplus  was 
bartered  to  somebody  else,  that  man 
became  a  specialist  in  that  particular 
thing  which  he  was  producing  and 
bartering,  and  the  man  to  whom  he 
liartered  or  sold  his  surplus  likewise 
had  a  surplus  himself  of  somethings: 
else  which  he  had  produced  and  could 
not  use.  And  as  time  has  gone  on  the 
surplus  w^hich  one  man  could  pro- 
duce above  his  own  personal  require- 
ments has  grown  greater  and  greater, 
and  the  specialization  has  grown  more 
and  more  intense,  until  we  have  ar- 
rived at  this  status  of  absolute  inter- 
dependence, requiring  the  greatest  de- 
gree  of  co-operation. 

The  great  danger  is  that  peopit. 
specializing    in    one    line    of    endeavoi 


will  not  know  enough  or  care  enough 
about  people  specializing  in  other  lines 
of  endeavor  to  understand  their  prob- 
lems and  difficulties  and  purposes  and 
ideals,  and  that  our  social  body  will 
become  so  broken  up  into  factions  that 
disintegration  due  to  warring  interests 
will  undermine  and  destroy  much  that 
man  has  painfully  labored  to  build  up 
dxiring  the  centuries  since  the  Dark 
Ages. 

Such  class  selfishness  caused  the  fall 
of  the  great  Roman  Empire.  The 
cities  had  grown  rich,  luxurious  and 
populous.  The  country  grew  less  and 
less  attractive.  To  support  the  excess 
of  the  cities,  the  rural  districts  were 
overtaxed,  agriculture  languished,  and 
gradually  brigandage  developed  and 
became  more  profitable  than  tillage. 
The  country  was  harassed  by  mar- 
auding bands,  and  was  in  no  condition 
to  withstand  attack.  The  city  hated 
the  country,  and  in  turn  was  hated. 
Class  was  pitted  against  class.  In- 
ternal weakness,  not  external  strength, 
destroyed  the  Roman  Em.pire. 

We  must  all  consider  each  other. 
We  must  not  be  like  the  old  darky 
in  the  South  who,  while  hoeing  one 
day,  saw  something  projecting  a  little 
way  in  front  of  him  he  took  to  be  a 
toad,  and  raising  his  hoe,  he  struck 
the  old  toad  sharply  and  then  discov- 
ered that  it  was  his  own  big  toe  which 
was  protruding  from  the  soft  earth. 
And  as  the  toe  bled  and  smarted  and 
hurt,  he  ssiid.  "Smart  away,  old  toe. 
'case  it  hurts  you  worse  than  it  hurts 
me  anyway."  Now.  it  is  exactly  that 
sort  of  philosophy  which  is  the  dan- 
gerous philosophy  in  this  country',  and 
indeed,   all   over  the   world,   today. 

And  so.  I  repeat,  we  are  all  special- 
ists, you  in  your  business.  I  in  mine. 
But  you  are  my  brother  and  my  keep- 
er, and  my  full  final  success  depends 
upon  your  help  and  sympathy. 

And  I  am  your  brother  and  your 
keeper,  and  your  full  final  success  de- 
pends upon  my  help  and  my  sympathy. 
You  have  the  franchise  and  you  vote 
for  things  which  affect  me.  I  have  the 
franchise  and  I  vote  for  things  which 
affect  you.  And  if  we  do  not  know 
something  of  the  problems  of  each 
other,  and  have  some  sj-mpathetic  in- 
terest in  those  problems,  then,  gen- 
tlemen. I  believe  we  have  no  right  to 
exercise  that  franchise  against  the  in- 
terest of  each  other,  both  of  us  being 
free  men. 

If  you  have  helped  to  build  up  a  bus- 
iness which  is  serving  its  purpose,  it 
is  my  duty  to  help  you  in  the  protec- 
tion of  that  business.  Let  us  not. 
therefore,  become  so  thoroughly  spec- 
ialists that  we  forget  the  other  fellow. 
If  our  work  narrows  down,  at  least 
let      our     knowledge     and   sympathies 


106 


THE  CENTRAL  STATES  CONFERENCE 


broaden.  If  some  other  interest  seems 
to  tread  on  our  interests,  let  us  try  to 
get  together  and  talk  things  over  and 
reason  them  out.  Let  us  try  some- 
thing constructive  instead  of  destruc- 
tive. Where  the  constructive  method 
is  applied,  peace,  prosperity,  happiness 
and  long  life  follow.  Where  the  de- 
structive method  is  applied,  we  have 
bickerings,  contentions,  strikes,  finan- 
cial loss,  war,  confusion,  unhappiness, 
death  and  mourning.  I  believe,  my 
friends,  that  all  the  difference  between 
Europe  today  and  Europe  in  July,  1914, 
can  be  measured  by  applying  the  rule 
of  cooperation 

But  I  must  not  forget  that  I  am  a 
specialist,  and  I  do  want  to  tell  you 
something  about  the  telephone  bus- 
iness. 

This  crude  device  which  I  hold  in 
my  hand  is  an  exact  replica  of  that 
through  which  a  young  inventor  first 
spoke  on  March  10,  1876,  in  a  little 
attic  room  in  Boston.  That  date  marks 
the  very  beginning  of  the  telephone. 
His  words  were  the  first  ever  carried 
over  a  wire.  He  was  unknown,  to 
science  and  to  the  world.  You  all 
know  his  name  is  Alexander  Graham 
Bell.  He  had  an  assistant,  his  elec- 
trician, his  mechanician,  Thomas  A. 
Watson — the  only  telephone  engineer 
in  the  world  at  that  time — and  Mr. 
Watson  heard  this  first  message  in  an 
adjoining  room  under  the  same  roof, 
a  hundred  feet  away. 

That  was  in  1876.  The  year  1915 
was  also  a  most  important  year  in  the 
development  of  the  telephone.  It 
marked  the  completion  not  only  of  the 
Panama  Canal  and  the  joining  togeth- 
er of  the  Atlantic  and  Pacific  oceans, 
but  it  marked  also  a  still  closer  union 
of  the  East  and  of  the  West,  of  the 
North  and  of  the  South.  San  Fran- 
cisco seemed  to  move  up  nearer  to 
New  York,  New  Orleans  nearer  to  Bos- 
ton, and  indeed,  all  of  the  states  and 
cities  of  this  broad  land  seem  to  come 
closer  together  by  the  medium  of  com- 
munication through  human  speech. 
Co-operation  became  easier. 

The  history  of  science  has  recorded 
no  more  dramatic  moment  than  when, 
on  January  2.5,  1915,  the  venerable  Pro- 
fessor Bell  lifted  the  receiver  from 
the  hook  in  New  York  and  called  to 
Watson,  the  friend  and  fellow-work- 
er of  his  youth,  in  San  Francisco. 

There  was  a  great  story  behind  that 
first  transcontinental  "hello" — a  story 
with  years  of  ridicule  at  its  beginning, 
strenuous  effort  and  much  discour- 
agement, then  years  of  great  develop- 
ment, of  success,  and  finally  this  dra- 
matic realization  of  hopes  entertained 
at  the  very  beginning  of  the  business. 
The  first  voice  that  ever  sent  a  tele- 
phone message   over  a  wire   spoke   in 


New  York,  and  the  first  ear  that  ever 
listened  to  a  telephone  message  heard 
in  San  Francisco.  In  1876  the  young 
inventor  and  his  associate  had  just 
produced  and  were  using  the  only 
telephone  in  the  world,  and  were  with 
difficulty  talking  over  a  few  feet  of 
wire.  In  1915  they  realize  that  their 
simple  contrivance  is  the  progenitor 
of  a  vast  system  operating  over  nine 
million  telephones,  connected  by  more 
than  twenty-one  million  miles  of  wire 
and  joining  together  the  country's 
greatest  and  most  distant  cities,  serv- 
ing the  uses  of  a  hundred  million  peo- 
ple. And  not  only  has  this  great  de- 
velopment taken  place  in  this  country, 
but  a  similar,  although  a  much  lesser 
development,  has  taken  place  through- 
out the  world  as  a  result  of  their 
pioneer  work. 

Dr.  Bell  gave  this  crude  device  to 
the  art  of  telephony.  It  was  enough, 
and  served  a  mighty  purpose.  The 
telephone  engineers  are  co-existent 
with  the  telephone.  They  have  devel- 
oped this,  which  was  considered  merely 
as  a  toy,  and  they  have  developed 
themselves  in  the  process.  They  have 
bridged  that  mighty  gap  measured  by 
the  difference  between  transmission 
over  one  hundred  feet,  and  transmis- 
sion over  3,400  miles  of  wire. 

Few  know  of  the  difficulties  which 
these  men  have  had  to  overcome,  or 
the  nature  of  the  forces  with  which 
it  has  been  necessary  to  deal.  The 
problems  have  been  too  intricate  for 
the  outsider  to  understand  or  even 
realize.  There  have  been  no  great 
masses  to  move.  No  immense  weights 
have  been  handled.  Nothing  which  the 
outsider  could  see  or  feel  or  under- 
stand has  taken  place.  But  all  this 
time  the  telephone  engineers  have  been 
dealing  with  the  most  occult  forces  of 
nature  in  infinitesimal  fractions. 

The  railroad  companies  and  tele- 
graph companies  had  built  many  lines 
of  wire  across  the  continent  from  New 
York  to  San  Francisco,  so  that  the 
mere  physical  construction  of  a  line 
across  the  continent  involved  no  new 
engineering  problem.  What  the  tele- 
phone engineers  had  to  do  was  to  con- 
struct a  line  of  wire  over  which  one 
could  talk  when  once  it  was  built, 
which  would  carry  sound  three  thous- 
and miles  with  nothing  but  breath 
as  the  motive  power. 

The  speed  of  the  voice  across  the 
continent  is  very  difficult  to  measure. 
It  is  practically  instantaneous.  A  fif- 
teenth of  a  second  is  about  as  nearly 
exact  as  it  can  be  measured.  Now, 
the  speed  of  sound  in  the  air  is  1,160 
feet  per  second,  while  the  speed  of 
sound  transmitted  through  the  medium 
of  the  telephone  is  about  56,000  miles 
per    second.     As    an    example    of    just 


THE  CENTRAL  STATES  CONFERENCE 


107 


what  this  means,  let  us  assume  that 
we  could  put  our  heads  out  of  the  win- 
dow here  in  Evansville  and  shout  loud 
enough  for  the  voice  to  be  heard  at 
San  Francisco.  It  would  require  over 
three  hours  for  our  shout  to  be  heard 
on  the  Pacific  Coast. 

What  does  the  telephone  really 
transmit?  You  will  doubtless  all  ans- 
wer, correctly,  that  it  transmits  a 
series  of  sound  waves.  These  sound 
waves  are  created  by  the  human  voice 
in  the  air  at  the  rate  of  about  2,100 
per  second.  They  strike  against  a 
metal  disc  in  the  telephone  trans- 
mitter and  are  there  transformed  into 
electrical  waves,  and  these  electrical 
waves  rush  along  the  path  provided 
for  them  over  the  wire  to  the  tele- 
phone receiver  at  the  other  end, 
where  the  electrical  waves  are  re- 
transformed  into  sound  waves  of  the 
same  character  as  those  originally 
produced  by  the  speaker's  voice. 
These  millions  and  millions  of  tiny 
waves  vary  infinitely  in  shape,  they 
transmit  the  timbre,  the  intonation, 
the  minutest  individual  quality  of  the 
human  voice.  They  are  as  different 
from  each  other  as  are  the  waves  of 
the  sea,  and  they  must  not  tumble  over 
each  other  or  splash  about  or  get  in 
each  other's  way,  but  must  break  on 
the  Pacific  coast  just  exactly  as  they 
started  out  here  in  Evansville.  If  they 
do  not,  the  telephone  line  is  of  no 
use  whatever.  In  all  this  vast  dis- 
tance, there  must  be  no  imperfection 
in  pole  or  crossarm  or  insulator  or 
wire  or  switchboard,  or  any  other  of 
the  thousands  of  elements  which  en- 
ter into  construction.  If  there  is  a 
break  or  disarrangement  of  the  thous- 
andth part  of  an  inch,  the  currents 
and  waves  and  words  do  not  reach 
San  Francisco  as  they  started,  and 
the  sound  is  unintelligible. 

The  telephone  engineer  has  no  way 
in  which  he  can  increase  his  motive 
power.  A  mere  breath  against  a  metal 
disc  is  all  that  he  has  to  work  with. 
The  task,  therefore,  is  so  delicate  as  to 
be  gigantic.  In  his  "History  of  the 
Telephone,"  Mr.  Herbert  N.  Casson 
uses  a  very  striking  figure  to  illustrate 
the  extreme  delicacy  and  weakness  of 
the  energy  employed  in  a  telephone 
message.     He  says: 

"The  energy  which  is  set  free  by  cool- 
ing one  spoonful  of  water  just  one  de- 
gree releases  sufficient  power  to  oper- 
ate a  telephone  for  10,000  years." 

And  another  example:  It  is  said 
there  is  in  an  ordinary  sixteen-candle- 
power  incandescent  electric  lamp  suffi- 
cient electrical  energy  to  operate  ten 
million  telephones! 

These  illustrations  will  give  you  a 
good  idea  of  the  real  problem  of  the 
telephone  engineer.     This  minute  baby 


current  of  electricity  must  literally  be 
coaxed  across  a  continent.  Nothing 
must  retard  it,  interfere  with  it,  de- 
stroy it.  It  must  go  under  rivers  and 
over  mountains,  through  blistering 
heat  and  bitter  cold.  This  is  the  work 
which  was  begun  in  Boston,  as  we  have 
seen,  forty  years  ago,  and  mile  after 
mile  in  distance  of  transmission  has 
been  gained,  city  after  city  has  been 
brought  into  instantaneous  communi- 
cation, until  the  goal  of  transconti- 
nental telephone  has  been  reached. 

You  may  well  ask,  what  man  made 
this  great  achievement  possible?  The 
answer  is  easy — no  one  man  did  it; 
ten  thousand  different  men.  Starting 
with  Bell  and  Watson,  an  army  of  pa- 
tient, industrious  men  have  devoted 
their  lives  to  the  problems  of  telephony, 
striving  day  and  night  for  one  great 
end.  And  that  end  was  not  the  perfec- 
tion of  this  great  transcontinental  line, 
great  though  that  achievement  may  be. 
That  end  was  and  is  the  perfection  of 
a  system  of  which  this  line  is  but  a 
very  small  part,  and  that  system  is  de- 
voted to  the  conquering  of  time  and 
space  for  the  benefit  of  the  people  of 
this  country  and  the  world.  In  office, 
laboratory  and  shop,  under  the  earth, 
high  up  in  the  air,  these  men  have 
thought  and  experimented  and  toiled, 
always  aiming  toward  the  accomplish- 
ment of  this  great  idea  of  universal 
service. 

When  this  crude  device  left  the  hands 
of  Bell  and  Watson,  in  the  eyes  of  the 
law  it  was  an  "essentially  perfected 
instrument."  It  was  claimed  for  it  that 
it  would  transmit  speeclj,  and  it  did 
transmit  speech,  and  that  was  all. 
This  diaphragm  is  simply  a  piece  of 
animal  membrane  tied  around  a  hol- 
lowed block  of  wood  and  in  touch  with 
a  magnet.  From  this  acorn,  the  oak  of 
the  Bell  system,  nation  wide,  and  all 
the  telephone  systems  in  the  world, 
have  grown.  This  instrument  is  the 
beginning  of  the  transcontinental  line. 
It  forms  the  first  step  in  a  great  evo- 
lution. We  shall  witness  tonight  the 
cumulative  effect  of  thousands  of  im- 
provements, some  great,  some  small,  in 
telephone,  transmitter,  line,  cable, 
switchboard,  and  every  other  piece  of 
apparatus  or  plant  required  in  the 
transmission  of  speech. 

In  all  the  3,000  miles  which  separate 
us  from  San  Francisco  there  is  no  one 
spot  in  line  or  equipment  where  a  man 
may  point  his  finger  and  say,  "Here  is 
the  secret  of  the  transcontinental  line, 
here  is  that  thing  which  makes  it  pos- 
sible to  telephone  from  Evansville  to 
San  Francisco."  Such  a  thing  does  not 
exist.  It  is  rather  the  perfection  at 
every  point  that  has  brought  this 
achievement  about.     It  is  the  develop- 


108 


THE  CENTRAL  STATES  CONFERENCE 


ment  of  the  transmitter  here  in  Evans- 
ville  which  makes  the  receiver  in  San 
Francisco  do  its  work  so  well.  It  is 
the  improvement  of  the  receiver  at 
San  Francisco  that  causes  the  trans- 
mitter in  Evansville  to  perform  its 
functions  so  admirably.  It  is,  in  fact, 
the  perfection  of  every  inch  of  line  and 
every  bit  of  mechanism  between  them 
that  enables  the  instrument  in  Evans- 
vile  to  talk  and  that  in  San  Francisco 
to  hear. 

The  building  of  the  transcontinental 
line  depended  on  the  solution  of  no  one 
i.solated  problem,  as  we  have  seen,  nor 
will  the  glory  of  it  be  given  to  any  one 
isolated  individual,  but  there  are  two 
names  that  will  always  stand  out  above 
the  rest  in  connection  with  it.  There 
must  be  great  generals  to  lead  armies 
that  win  victories. 

For  many  years  this  line  from  ocean 
to  ocean  has  been  the  dream  of  our 
president,  Mr.  Theodore  N.  Vail,  the 
goal  towards  which  he  has  pushed  and 
towards  which  he  has  steadily  led  his 
associates.  This  has  not  been  an  idle 
fancy  of  a  dreamer,  but  a  prophetic 
vision.  Mr.  Vail  can  see  anything  in 
telephony,  except  impossibilities.  He 
not  only  cannot  see  impossibilities,  but 
he  will  not  admit  that  they  exist;  nei- 
ther will  he  allow  his  associates  to 
consider  them  for  one  moment.  "Im- 
possible," is  not  in  his  dictionary  of 
engineering  terms.  Almost  from  the 
beginning  of  the  telephone,  Mr.  Vail's 
energy  and  enthusiasm,  his  dauntless 
optimism  and  ambition  in  everything 
relating  to  the  perfection  and  promo- 
tion of  his  idea  of  universal  service, 
have  dominated  the  company  and  made 
enthusiasts  of  all  those  related  to  the 
system. 

At  Mr.  Vail's  side  through  most  of 
these  years  has  been  a  slightly  built, 
live,  keen-eyed  Massachusetts  man, 
who  never  has  to  be  told  but  once 
when  a  great  thing  is  to  be  done.  A 
nod,  and  a  line  goes  to  Denver;  a  word, 
and  it  stretches  to  the  Pacific  coast. 
This  man  is  John  J.  Carty,  chief  engi- 
neer of  the  American  Telephone  and 
Telegraph  company.  Mr.  Carty  is  in- 
deed a  leader  among  scientific  men  of 
all  nations  and  has  been  repeatedly 
honored  by  the  rulers  of  the  different 
nations  for  his  distinguished  services  in 
engineering  accomplishment,  his  wide 
knowledge,  keen  judgment  and  indom- 
itable energy.  These  have  combined 
to  make  him  one  of  the  great  factors 
in  telephone  achievement  and  advance- 
ment, not  only  in  this  country,  but 
throughout  the  entire  world.  Others 
h:ive  played  big  parts  in  this  drama  of 
human  endeavor  and  achievement,  and 
thousands  have  given  their  share  of 
thought   and   labor.     Mr.    Vail   and    Mr. 


Carty  would  be  the  last  men  to  claim 
an  undue  share  of  the  credit  for  this 
great  work,  but  their  names  will  ever 
be   linked   together   in   this   triumph. 

But  something  more  than  engineers 
was  necessary  in  developing  and  pro- 
ducing this  great  telephone  system.  A 
large  company  of  skilled  mechanics  has 
also  been  developed.  You  and  I  would 
make  sorry  work  of  building  a  pole 
line,  installing  a  switchboard  or  string- 
ing subscribers'  wires,  and  I  dare  say 
that  very  few  of  us  would  even  know 
how  to  install  a  telephone  if  it  were 
placed  in  our  hands  a  completed  and 
perfected  instrument.  The  plant  de- 
partment of  the  telephone  company 
does  this  work.  Now,  the  plant  depart- 
ment has  nothing  whatever  to  do  with 
horticulture,  but  it  has  invaded  the 
forests  and  taken  therefrom  enough 
timber  to  form  a  complete  stockade 
around  a  lake  larger  than  Lake  Erie, 
with  each  pole  touching  its  neighbor. 
It  handles  each  year  many  millions  of 
pounds  of  coppei-.  It  installs  every 
switchboard,  it  invades  every  man's 
back  yard,  goes  into  every  man's  house 
with  his  telephone.  It  works  every 
second  of  the  twenty-four  hours,  not 
only  in  fair  weather,  but  in  hurricane 
and  flood  and  fire  and  earthquake,  con- 
tinually building  and  maintaining  the 
indescribable  network  of  appliances 
which  go  to  make  up  the  telephone  sys- 
tem. 

Now,  neither  the  engineers  nor  the 
plant  department  people  could  use  that 
telephone  plant  after  it  was  once  con- 
structed. Another  army  of  people 
must  be  recruited  for  this  special  ser- 
vice. A  telephone  lineman  is  indis- 
pensible  when  it  comes  to  repairing  a 
break  in  a  circuit,  but  if  you  were  to 
put  him  in  front  of  a  switchboard  and 
ask  him  to  connect  you  with  some  other 
number,  he  would  be  out  of  his  ele- 
ment and  absolutely  useless.  And  we 
have  found  after  long  and  bitter  ex- 
perience that  not  only  the  plant  man  is 
useless  for  such  work,  but  any  man  and 
every  man  is  nearly  useless  for  that 
high  type  of  service  which  the  tele- 
phone operator  renders  to  our  present 
civilization.  A  great  deal  of  education 
is  required  in  the  traffic  department 
of  a  telephone  company.  A  switch- 
board operator,  in  the  first  place,  must 
have  physical  characteristics  which  fit 
her  for  the  position.  Her  hearing  must 
be  at  least  average  and  normal,  her 
sight  up  to  standard.  She  cannot  be 
too  short  nor  too  tall,  and  must  be  able 
to  i-each  a  certain  distance  with  her 
arms.  Then  she  must  be  educated  and 
trained  not  only  as  to  the  mechanical 
part  of  her  work,  but  her  disposition, 
her  attitude  to  the  public  which  she  is 
serving  must  be  brought  into  conform- 


THE  CENTRAL  STATES  CONFERENCE 


109 


ity  with  the  requirements  of  a  most 
difficult  service.  But  when  these  young 
women  have  been  thus  trained,  in  an 
educational  institution  which  turns  out 
each  year  about  thirty  thousand  gradu- 
ates, they  perform  a  most  wonderful 
service.  It  is  seldom  they  ever  shirk  a 
responsibility,  and  nearly  every  great 
flood  or  fire  or  earthquake  furnishes 
testimony  of  their  fidelity  even  in  times 
of  great  personal  peril.  And  there  have 
been  instances  where  they  have  lost 
their  lives  in  remaining  at  the  switch- 
boards sending  out  warnings  of  danger 
to  others. 

But  what  would  be  the  use  of  a  piant 
department  and  a  traffic  department  if 
we  did  not  also  have  a  commercial 
depai-tment?  Somebody  has  to  go  out 
and  meet  the  public  and  sell  the  ser- 
vice to  the  public  and  collect  the  money 
for  the  service,  and  that  is  the  func- 
tion of  the  commercial  department. 
The  commercial  department  makes  the 
rates  upon  which  telephone  service  is 
based,  and  when  you  consider  that 
there  are  nearly  five  billion  long-dis- 
tance telephone  rates  in  the  United 
States,  you  will  realize  that  this  is 
something  of  a  task.  The  commercial 
department  has  to  do  with  the  develop- 
ment of  the  different  classes  of  service, 
and  must  at  all  times  function  per- 
fectly with  the  plant  and  traffic  depart- 
ments. 

These  three  departments,  performing 
three  different  functions,  constitute  the 
operating  organization  of  the  Bell  sys- 
tem: A  plant  department,  to  build  the 
plant  and  keep  it  in  proper  repair;  a 
traffic  department,  to  take  that  plant 
and  render  service  to  the  public;  a 
commercial  department,  to  represent 
the  company  in  all  its  relations  with 
the  public.  Each  of  these  departments 
must  perform  its  functions  properly 
and  co-operate  perfectly,  or  we  shall 
have  no  demonstration  of  transconti- 
nental  telephony  this  evening. 

Besides  these  departments  are  the 
engineering  department,  the  legal  de- 
partment, and  the  accounting  depart- 
ment, all  having  most  important  and 
exacting  duties  to  perform  in  the  oper- 
ation of  the  business. 

I  hope  you  will  gain  some  idea  from 
the  moving  pictures  of  the  complicated 
equipment  necessary  to  connect  almost 
instantaneously  any  one  of  the  500,000 
subscribers  in  a  great  metropolitan  ex- 
change like  New  York,  not  only  with 
any  other  subscriber  in  New  York,, 
but  with  any  other  subscriber  through- 
out the  United  States. 

The  point  I  wish  to  make  very  clear 
in  these  remarks  and  in  the  use  of  the 
pictures  is  that  the  telephone  system 
as  a  whole  is  the  talking  machine,  and 
not  the  transmitter  and  receiver,  which 


are  the  only  parts  of  the  machine  vis- 
ible to  the  ordinary  patron.  The  trans- 
mitter and  receiver,  without  the  line, 
the  switchboard,  the  relays,  the  trans- 
positions, the  loading  coils  and  a  mul- 
titude of  other  and  various  devices, 
would  be  of  no  earthly  use,  and  all  of 
these  electrical  and  mechanical  devices, 
if  placed  under  the  control  of  men  and 
women  who  were  unorganized  and  had 
not  been  trained  to  the  work,  could  re- 
sult only  in  utter  confusion  of  service. 
To  develop  these  hundreds  of  me- 
chanical and  electrical  contrivances, 
and  the  men  and  women  trained  in 
using  them,  has  required  the  undivided 
attention  of  hundreds  of  scientists  and 
executives  of  the  highest  rank.  It  has 
required  the  building  of  actual  lines 
over  which  expensive  experiments  and 
tests  might  be  made,  before  those  lines 
could  be  devoted  to  the  giving  of  ser- 
vice. 

The  cost  of  these  experiments,  the 
cost  of  equipment — millions  of  dollars' 
worth — which  had  to  be  constructed 
and  tried  out  only  to  be  scrapped  and 
constructed  over  again,  would  have 
been  away  beyond  the  financial  ability 
of  any  one  company,  and  no  line  ex- 
tending through  the  territory  of  any 
one  company  could  have  been  used  to 
work  out  the  numerous  experiments 
and  tests  which  have  been  required  to 
develop  the  art  of  long  distance  tele- 
phony. 

I  have  said  that  the  mere  physical 
construction  of  the  transcontinental 
line  involved  no  new  or  exceedingly 
difficult  engineering  task,  but  in  spite 
of  that  fact,  the  cost  of  constructing 
the  line  across  the  continent  is  im- 
pressive when  we  consider  the  magni- 
tude of  the  undertaking.  The  data  and 
figures  are  large.  For  instance,  the 
line  crosses  thirteen  states;  it  is  car- 
ried on  130,000  poles.  Four  hard- 
drawn  copper  wires,  .165  of  an  inch  in 
diameter,  run  side  by  side  over  the  en- 
tire distance,  establishing  two  physical 
and  one  so-called  phantom  circuit.  One 
mile  of  single  wire  weighs  435  pounds, 
the  weight  of  the  wires  in  the  entire 
line  being  5,920,000  pounds  or  2,960  tons 
of  copper.  This  amount  of  copper  is 
required  for  the  transmission  lines 
alone.  In  addition,  each  one  of  the 
physical  circuits  requires  some  13,500 
miles  of  fine  hair-like  insulated  wire, 
.004  of  an  inch  in  diameter,  for  its  load- 
ing coils. 

Simply  to  string  this  immense 
amount  of  wire  across  the  continent,  to 
set  poles  and  insure  insulation,  to  con- 
quer the  innumerable  difficulties  offered 
by  land,  water,  forests,  mountains,  des- 
erts, rivers  and  lakes,  was  in  itself  a 
task  of  no  mean  magnitude. 
The  Panama  canal  is  hailed  as  one  of 


no 


THE  CENTRAL  STATES  CONFERENCE 


the  greatest  achievements  of  the  world 
— as  Indeed  it  is — but  the  almost  in- 
visible lines  of  the  Bell  system,  spread- 
ing a  thin  blanket  all  over  this  entire 
country,  and  considered  simply  with 
respect  to  labor  and  cost,  constitute  a 
monumental  achievement.  The  canal 
was  begun  about  ten  years  ago,  and 
has  cost  upwards  of  $310,000,000.  With- 
in that  same  space  of  time  the  Bell 
companies  have  spent  more  than  twice 
that  amount  in  engineering  and  con- 
struction work  alone. 

During  the  year  1915  we  made 
the  announcement  of  another  tre- 
mendous advance  in  the  art  of 
communication.  To  me  it  was  a  new 
Idea  to  consider  this  broad  continent 
of  ours  as  too  narrow  for  any  sort  of 
work  or  experiment,  but  that  is  exactly 
the  condition  with  which  the  engineers 
of  the  Bell  system  were  confronted. 
They  did  not  have  space  in  the  United 
States  to  carry  on  their  work,  and  in 
order  to  perfect  their  plans  it  was  nec- 
essary to  send  a  man  as  far  west  as 
Honolulu  and  another  as  far  east  as 
Paris,  and  without  wires  we  talked  with 
those  men  over  the  telephone  from  the 
naval  wireless  station  at  Arlington,  Va. 

This  wonderful  development  is  still 
in  the  development  stage.  I  shall  not 
attempt  to  tell  you  of  it  this  evening. 
The  discussion  of  that  we  will  leave 
until  we  can  meet  here  perhaps  some- 
time for  a  wireless  demonstration,  when 
we  shall  be  able  to  talk  not  only  across 
this  continent  but  across  other  conti- 
nents and  the  oceans  as  well. 

In  the  history  of  the  telephone  there 
have,  of  course,  been  no  greater 
achievements  than  the  development  of 
transcontinental  telephony  and  of  wire- 
less telephony.  The  gain  to  science  is 
great,  but  the  gain  to  the  people,  to  the 
nation,  is  much  more  precious,  and  the 
benefit  to  commerce  and  society  can 
scarcely  be  measured. 

This  is  a  final  blow  to  sectionalism. 
The  East  is  no  longer  separated  from 
the  West,  nor  tht  North  from  the  South. 
The  railways  and  the  new  canal  and 
the  facilities  for  communication  are 
bringing  the  states  closer  and  closer  to- 
gether. Isolation  is  the  cause  of  pro- 
vincialism, and  there  is  no  longer  iso- 
lation in  this  country.  People  and 
communities  cannot  drift  far  apart 
when  they  are  in  such  constant  touch 
with  each  other.  Co-operation  is  ren- 
dered easy,  natural,  necessary,  perma- 
nent. 

It  is  a  wonderful  thing,  my  friends, 
that  we  can  speak  from  the  Atlantic  to 
the  Pacific  or  from  any  point  between 
those  two  great  oceans  in  either  direc- 
tion. That  constitutes  a  wonderful 
scientific  fact.  The  line  connecting  the 
two   seaboards   is   the   longest   line   for 


the  transmission  of  speech  in  the  world, 
and  if  there  were  to  be  constructed  a 
line  connecting  any  other  two  equally 
distant  points  on  the  earth's  surface  in 
any  other  country  on  earth,  after  the 
line  had  been  constructed  the  people  at 
one  point  could  not  understand  the  peo- 
ple speaking  from  the  other  point.  And 
this  constitutes,  in  my  opinion,  a  great 
social  fact.  We  have  a  common  lan- 
guage in  this  country;  we  do  not  need 
translation.  All  we  need  is  transmis- 
sion, and  it  is  the  function  of  the  Bell 
system  to  supply  that. 

Now,  the  expression,  "We  do  not  need 
translation  in  this  country,"  is  not 
merely  a  pat  phrase.  I  believe  it  ex- 
presses a  fact  of  most  tremendous  so- 
cial, economic,  national  importance — 
indeed,  I  would  go  further,  and  say  in- 
ternational importance.  The  effect  of 
language  on  race  and  civilization  is 
coming  to  be  better  understood,  and  in 
North  America  we  have  two  examples 
which  serve  to  illustrate  this  point  per- 
fectly. 

To  the  north  is  a  great  country,  in- 
habited for  the  most  part  by  English- 
speaking  people.  In  all  the  four  thou- 
sand miles  of  the  international  bound- 
ary neither  nation  has  a  protecting  fort. 
There  are  no  guards,  no  warships,  no 
armies,  on  either  side  of  that  boundary, 
and  peace  has  prevailed  without  inter- 
ruption for  more  than  a  hundred  years. 
There  is  constant  co-operation. 

To  the  south  is  another  great  coun- 
try, but  inhabited  by  people  who  do 
not  speak  English,  a  people  of  different 
ideals,  and  with  this  country  we  have 
had  wars  in  the  past.  We  have  failed 
to  co-operate.  It  has  been  necessary 
almost  all  the  time  for  us  to  protect 
our  borders  with  soldiers,  and  at  the 
present  time  the  people  along  our 
southern  border  are  hated  and  hate 
with  an  intensity  which,  in  spite  of 
"watchful  waiting,"  may  bring  us  at 
last  to  a  condition  which  will  be  recog- 
nized even  by  our  government  as  war. 

Now,  I  do  not  mean  to  infer  that  the 
fact  of  a  common  language  has  made 
all  the  difference  in  these  international 
relations,  but  I  do  believe  that  it  has 
been  and  is  the  greatest  single  factor 
for  peace  to  the  north  and  discord  to 
the  south.  The  power  of  cohesion  in  a 
common  language  is  tremendous;  con- 
fusion of  tongues  is  a  constant  menace, 
leading  to  discord,  while  the  ability  to 
speak  with  our  neighbors  has  in  it  ele- 
ments of  real  preparation  for  peace. 
The  surest  way  to  secure  co-operation 
between  individuals  or  nations  is  for 
them  to  talk  with  each  other. 

Now,  you  may  account  for  this  in  any 
way  you  will,  but  the  fact  remains  that 
throughout  the  history  of  the  world, 
wars    between    factions     speaking     the 


THE  CENTRAL  STATES  CONFERENCE  111 

same  language  have  been  rare  indeed.  and,  we  hope  and  pray,  into  closer  co- 

And  so.  I  repeat,  it  is  a  social  fact  of  operation,   closer  fellowship, 

tremendous    significance    that   together  ^  The    telephone    was     born     here     in 

.  ,  ,  ,  ,.  ..  America.  Here  it  has  reached  its 
with  other  public  service  corporations  greatest  perfection.  Most  of  the  great 
in  this  country,  we  are  bringing  the  governments  of  Europe  own  their  tele- 
people  of  widely  separated  states  and  phone  systems,  but  no  foreign  telephone 
countries  closer  and  closer  toeether  administration  has  ever  invented  or  de- 
countries  closer  ana  closer  togemer.  veloped  a  single  important  contribution 

"What  we  need  in  this  country,  and  ^o  the  telephone  art.  Under  no  other 
indeed  all  over  the  world,  is  that  people  conditions  except  such  as  exist  in 
shall  get  together,  shall  understand  America  could  the  telephone  business 
each  other,  shall  talk  to  each  other,  possibly  have  come  to  its  highest  de- 
shall  co-operate,  and  it  is  the  inten-  velopment.  With  its  dozens  of  tele- 
tion  of  the  American  Telephone  and  phone  systems,  Europe  has  no  tele- 
Telegraph  company — and  I  say  this  phone  line  that  can  compare  in  a  small 
without  hesitation  or  fear  of  being  ac-  degree  with  this  line.  The  transcon- 
cused  of  a  selfish  desire  for  monopoly — ■  tinental  line  is  the  culmination  of  an 
to  make  it  possible  for  every  man  who  art  which  was  born  in  the  United 
can  talk,  to  talk  over  the  telephone  to  States,  the  high  mark  of  a  science 
every  man  who  can  hear.  And  we  are  which  was  created  and  has  been  devel- 
not  going  to  be  satisfied,  and  we  are  oped  entirely  by  American  genius  and 
not  going  to  stop,  when  the  people  of  American  enterprise.  I  believe  it  is  the 
this  country  have  been  given  universal  highest  achievement  of  practical  sci- 
telephone  service;  but  by  the  means  of  ence  up  to  today.  No  other  nation  has 
wireless  telephony  we  hope  to  bring  produced  anything  like  it,  nor  could 
all  the  countries  and  all  the  peoples  any  other  nation.  It  is  sui  generis,  it  is 
of  the  world  into  a  closer  relationship —  gigantic,  and  it  is  entirely  American. 

As  soon  as  Mr.  Kingsbury  completed  his  address  he  took  charge  of 
the  Transcontinental  telephone  demonstration  and  the  500  men  and 
women  around  the  banquet  tables  at  Evansville  heard  distinctly,  noted 
men  talk  from  coast  to  coast.  The  banqueters  were  connected  with  the 
following  cities:  Chicago,  Pittsburg,  New  York,  Washington,  D.  C,  Bos- 
ton, Omaha,  Denver,  Salt  Lake  City,  Winnemucca  Nev.,  San  Francisco 
and  Sacramento. 

Evansville  men  and  visitors  at  the  banquet  talked  with  the  follow- 
ing: Gov.  Hiram  Johnson,  California;  Robert  Newton  Lynch,  President 
San  Francisco  Chamber  of  Commerce;  Mr.  Delaney,  San  Francisco,  who 
talked  for  Mayor  James  Rollf;  Allison  Stacker,  state  treasurer  of  Colo- 
rado; Dr.  Harry  Pratt  Judson,  president  of  the  University  of  Chicago; 
George  M.  Reynolds,  president  of  the  Continental  and  Commercial  Na- 
tional Bank,  Chicago;  Lieutenant  Governor  Coolidge,  of  Massachusetts; 
President  Weed,  of  the  Boston  Chamber  of  Commerce;  Union  N.  Bethel, 
President  New  York  Telephone  Company;  William  Fellows  Morgan, 
President  Merchants  Association  of  New  York;  Hon.  Josephus  Daniels, 
Secretary  of  the  Navy,  Washington,  D.  C;  Hon.  Robert  Lansing,  Secretary 
of  State,  Washington,  D.  C.,;  Hon.  Thomas  R.  Marshall,  Vice-President 
United  States. 

After  the  roll  call  of  cities  Mr.  Kingsbury  was  connected  with  Sacra- 
mento, Cal.,  and  the  telephone  conversation  was  as  follows: 

Mr.  Kingsbury:  Well,  now,  I  think  the  schedule  says  we  are  first 
to  have  a  talk  with  Governor  Johnson  at  Sacramento.  Has  that  been 
arranged? 

Mr.  Butts:    (Sacramento)  Yes,  Mr.  Kingsbury. 

Mr.  Kingsbury:  Well,  I  guess  we  had  better  get  the  Governor  on 
right  away.  Can  you  get  him  right  away? 

Mr.  Butts:      (Sacramento)  Yes,  I  think  so. 

Mr.  Kingsbury:     Where  is  the  Governor? 

Mr.  Butts  (Sacramento  )At  the  gubernatorial  house  in  Sacramento. 

Mr.  Kingsbury:     Is  this  Governor  Johnson? 


112  THE  CENTRAL  STATES  CONFERENCE 

Sacramento  Operator:  No,  this  is  the  Sacramento  operator.  I  will 
put  the  Governor  on  right  now. 

Governor  Hiram  Johnson:       (At  Sacramento)    Hello,  Mr.  Kingsbury. 

Mr.  Kingsbury:     Hello,  Governor.  Is  this  Governor  Johnson? 

Governor  Johnson:      Yes,  sir. 

Mr.  Kingsbury:  This  is  Mr.  Kingsbury,  Governor,  of  the  Bell  Sys- 
tem. 

Governor  Johnson:     Yes  sir. 

Mr.  Kingsbury:  I  have  had  the  pleasure  of  hearing  you  before.  I 
am  very  glad  to  greet  you  again. 

Governor  Johnson:   Are  you  down  at  Evansville,  Indiana? 

Mr.  Kingsbury:     Yes  sir,  I  am  at  Evansville.  Where  are  you? 

Governor  Johnson:      I  am  at  the  gubernatorial  house  in  Sacramento. 

Mr.  Kingsbury:  I  see.  Mr.  Henry  C.  Murphy,  Editor  of  the  Evansville 
Courier,  of  Evansville,  Indiana,  wants  to  say  a  few  words  to  you.  We  are 
all  glad  to  hear  you.  Governor. 

Governor  Johnson:  I  am  very  glad,  indeed,  to  have  the  opportunity 
of  talking  to  you  over  long-distance  wire.  I  will  be  very  glad  to  talk  to  Mr. 
Murphy. 

Mr.  Kingsbury:     Here  is  Mr.  Murphy,  Governor. 

Mr.  Henry  C.  Murphy:  I  want  to  send  you  the  greetings  from  In- 
diana and  from  the  Conference  we  are  holding  here  in  the  City  of  Evans- 
ville. You  know  what  happened  to  Indiana  in  the  last  election,  but  we 
didn't  for  a  long  time  know  what  happened  in  California. 

Governor  Johnson:  That's  so.  From  the  complex  situation  in  Cali- 
fornia it  was  impossible  to  tell  with  anything  like  exactness  for  a  long 
time  just  what  would  happen.  Even  at  that  we  didn't  think  that  it  would 
have  such  an  effect  on  the  country.  We  now  understand  that  the  situation 
in  California  really  had  a  great  effect  on  the  outcome  of  the  last  election 
and  in  a  way  decided  the  result.  Can  you  hear  me  all  right? 

Mr.  Henry  C.  Murphy:  Yes,  we  can  all  hear  you.  Mr.  Frank  Walsh, 
of  Kansas  City,  is  here  and  partook  in  the  Conference.  He  wants  to  say 
a  word  to  you. 

Governor  Johnson:  Oh,  I  will  be  glad  to  hear  from  him.  Hello,  Mr. 
Walsh. 

Mr.  Frank  P.  Walsh:      Hello,  Governor.     Is  this  Governor  Johnson? 

Governor  Johnson:     Yes. 

Mr.  Frank  P.  Walsh:     How  are  you  this  evening? 

Governor  Johnson:     All  right.     How  are  you? 

Mr.  Frank  P.  Walsh:  Pretty  well,  thank  you.  I  want  to  congratu- 
late you  on  your  late  success. 

Governor  Johnson:      That  is  mighty  good  of  you. 

Mr.  Frank  P.  Walsh:     I  am  talking  from  Evan.sville,  Indiana. 

Governor  Johnson:     I  am  glad  to  hear  your  voice  tonight. 

Mr.  Frank  P.  Walsh:  Well,  I  am  certainly  honored  in  talking  to  you, 
and  especially  under  these  circumstances.  I  recall  the  night  you  made 
your  opening  speech  in  the  last  gubernatorial  campaign  at  I^os  Angeles 
when  some  of  us  predicted  that  perhaps  you  would  be  President. 

Governor  Johnson:     Well,  that  is  very  nice. 

Mr.  Frank  P.  Walsh:  I  am  speaking  now  from  Evansville.  Indiana, 
after  a  dinner  at  which  about  five  hundred  people  are  in  attendance.  This 
dinner  is  held  at  the  close  of  the  Central  States  Conference  on  Rail  and 
Water  Transportation.  We  want  to  send  you  our  congratulations  and 
greetings. 


THE  CENTRAL  STATES  CONFERENCE  113 

Governar  Johnson:     I  thank  you  A^ery  much. 

Mr.  Frank  P.  Walsh:  I  think  we  have  had  one  of  the  most  impoi'tant 
conferences  that  was  ever  held  in  the  Central  States.  We  have  just  lis- 
tened to  one  of  the  most  remarkable  speeches  that  was  ever  made  in  any 
place  by  Mr.  Kingsbury,  the  Vice-President  of  this  Telephone  Company, 
through  whose  courtesy  we  are  hearing  from  you  this  evening.  We  hope 
that  you  will  be  with  us  soon  on  the  shores  of  the  Ohio  river. 

Governor  Johnson:  Yes,  I  hope  so,  too.  Are  you  now  at  the  ban- 
quet? 

Mr.  Frank  Walsh:  We  are  now  at  the  banquet,  Governor,  at  a  very 
beautiful  hotel  situated  on  the  banks  of  the  Ohio  river. 

Governor  Johnson:  I  am  in  Sacramento  at  the  gubernatorial  house. 
I  have  just  been  informed  by  the  kind  gentleman  here  that  the  people  over 
at  Evansville,  Indiana,  are  having  a  splendid  time.  I  Avant  to  greet  you 
from  the  people  of  California,  and  to  congratulate  you  upon  your  confer- 
ence and  upon  the  very  great  work  that  you  have  done.  This  country 
owes  much  to  the  people  who  in  the  past  gave  their  energy  and  their 
thought  to  the  upbuilding  of  the  great  transportation  systems  of  this  coun- 
try. Much  depends  upon  the  transportation  facilities  that  are  accorded 
to  a  great  nation  like  ours  and  upon  our  transportation  facilities  in  the 
future,  upon  their  proper  regulation  and  efficiency  depend  the  commer- 
cial welfare  of  this  country.  I  trust  that  those  in  the  Conference  have 
realized  that.  I  think  the  people  of  the  country  should  realize  the  possi- 
bilities of  such  a  conference  as  this  and  the  potential  success  that  should 
be  acquired  through  your  meetings  and  deliberations  upon  such  a  great 
problem  as  the  one  you  have  had  under  consideration.  I  do  not  think 
you  quite  fully  realize  the  effect  of  your  work,  not  only  the  effect  upon 
the  Senators  and  Congressmen  of  the  United  States,  but  upon  everybody 
who  is  dealing  with  these  questions  all  over  the  country. 

You  know,  I  think  it  is  the  most  wonderful  thing  that  I  can  sit  here, 
more  than  two  thousand  miles  away  from  you,  and  because  of  modern 
science,  talk  to  you  as  though  you  Avere  in  the  next  room.  It  seems  in- 
credible to  me.  But  it  is  due  to  this  sort  of  thing,  to  the  path  which 
the  telephone  has  blazed  through  the  country,  as  the  railways  have  blazed 
through  the  country,  that  those  who  formerly  were  .separated  by  so  many, 
many  miles  have  been  brought  so  close  together.  ^  And  it  is  just  that 
modern  invention  and  modern  science  which  is  responsible  for  all  of  this. 
It  is  just  that  kind  of  science,  that  kind  of  inventive  genius,  backed  by 
American  ingenuity,  that  will  soh'e  all  the  problems  that  are  presented 
to  us.  I  want  to  say  to  the  different  people  there  that  we  on  the  western 
shores  of  this  country,  in  this  region,  will  be  glad  to  participate  in  any 
conferences  of  the  kind  you  have  held  there.  I  think  it  is  a  wonderful 
thing  that  I  can  express  myself  in  this  Avay  to  you  who  are  so  far  away  and 
that  I  can  greet  you  over  the  'phone  in  this  fashion,  and  I  am  sure  we  owe 
much  to  the  company  through  whose  courtesies  we  are  enabled  to  talk 
to  each  other  in  this  way. 

I  am  very  glad  that  I  have  had  the  opportunity  to  say  just  a  word 
to  you  tonight  and  I  wish  every  one  of  you  everything  that  this  glorious 
holiday  season  brings,  eA-erything  that  your  heart  desires.  Goodnight 
and  good  luck  to  you. 

Mr.  Frank  P.  Walsh:  Thank  you  A'ery  much,  Mr.  Governor.  We  Avish 
you  the  best  of  success.     Goodnight.     Goodbye. 

Governor  Johnson:      Thank  you  very  much.     Good  night. 

Mr.  Kingsbury:      Hello,  San  Francisco. 

Mr.  Beck  (San  Francisco)  :  Hello,  Mr.  Kingsbury.  This  is  San 
Francisco,  Beck  talking. 

Mr.  Kingsbury:  I  see  by  reference  to  the  program  that  we  are  to  talk 
to  Mr.  Rolph,  Mayor  of  San  Francisco.     Is  Mr.  Rolph  there? 


114  THE  CENTRAL  STATES  CONFERENCE 

Mr.  Beck  (San  Francisco):  No,  Mr.  King.sbury.  Mr.  Rolph  is  out 
of  town,  but  we  have  another  party  on  the  line. 

Mr.  Kingsbury:     All  right.     That  is  fine. 

Mr.  Beck  (San  Francisco):  We  will  get  him  right  away.  Mr.  De- 
-laney  is  not  at  his  home.     So  we  will  try  to  get  him  at  the  office. 

Mr.  Kingsbury:  (To  the  audience)  I  want  to  call  your  attention  to 
the  fact  that  these  people  are  not  gathered  at  any  particular  place  as  we 
are  tonight,  but  they  are  at  their  own  places.  It  means  a  good  deal  to  be 
able  to  sit  down  at  this  instrument  and  talk  to  anyone  of  the  millions  of 
subscribers  in  the  United  States,  wherever  they  may  be.  They  are  trying 
to  get  Mr.  Delaney  down  at  his  office. 

Mr.  Delaney  (at  San  Francisco):     Hello. 

Mr.  Kingsbury:  This  is  Mr.  Kingsbury,  Mr.  Delaney.  I  am  very 
glad  to  talk  to  you  again. 

Mr.  Delaney:     I  am  awfully  glad  to  hear  from  you. 

Mr.  Kingsbury:     I  haven't  heard  your  voice  for  six  months. 

Mr.  Delaney:     When  are  you  coming  out  to  San  Francisco? 

Mr.  Kingsbury:  Well,  I  will  be  glad  to  come  out  there  when  fishing 
is  all  right.  Whenever  I  do  come  there  is  something  wrong  and  we  don't 
get  any  fish.  Now,  Mayor  Bosse  of  Evansville,  Indiana,  wants  to  speak 
to  you  for  just  a  moment. 

Mr.  Delaney:      I  will  be  very  glad  to  talk  to  him. 

Hon.  Benjamin  Bosse:      Hello,  Mr.  Delaney. 

Mr.  Delaney:     Good  evening,  Mr.  Mayor. 

Hon.  Benjamin  Bosse:     How  is  California? 

Mr.  Delaney:  Oh,  California  is  very  warm  and  nice.  It  couldn't  be 
more  beautiful  than  it  is.  We  are  just  now  having  the  most  wonderful 
weather  that  you  could  possibly  have,  just  like  a  fine  April  day. 

Hon.  Benjamin  Bosse:  We  are  delighted  to  hear  that  Governor 
Johnson  is  going  to  be  your  United  States  Senator. 

Mr.  Delaney:  Yes,  we  are  very  glad  that  the  Governor  is  going  to 
be  United  States  Senator. 

Hon.  Benjamin  Bosse:  I  am  sorry  he  could  not  take  part  in  our 
Conference  over  here. 

Mr.  Delaney:     Well,  I  wish  we  could. 

Hon.  Benjamin  Bosse:  We  are  trying  our  best  to  get  everybody  to 
understand  that  the  business  of  this  country  can  only  be  done  if  we  all 
co-operate. 

Mr.  Delaney:  Well,  that  is  very  true.  I  think  you  will  find  out  we 
are  very  much  interested  in  what  you  are  doing  there.  I  will  appreciate 
it  very  much  if  you  will  send  me  any  account  that  you  may  have  of  the 
proceedings  when  they  are  published.  I  would  like  to  get  a  copy  of  them 
to  keep  in  my  office  and  to  read  over  and  study.  I  think  they  will  be  very 
valuable. 

Hon.  Benjamin  Bosse:  We  will  be  glad  to  send  you  a  copy.  I  want 
to  thank  you  very  much  for  this  communication. 

Mr.  Delaney:  Well,  it  is  a  pleasure  to  talk  to  you  there.  I  want 
to  thank  you  very  much  for  the  opportunity,  with  the  best  compliments  of 
the  season. 

Hon.  Benjamin  Bosse:     Good  night. 

Mr.  Delaney:     Good  night. 

Mr.  Kingsbury:     Hello,  Mr.  Beck. 

Mr.  Beck   (San  Francisco) :      Hello,  Mr.  Kingsbury. 

Mr.  Kingsbury:     Now,  Mr.  Wilbur  Erskine,  President  of  the  Evans- 


THE  CENTRAL  STATES  CONFERENCE  H5 

ville  Chamber  of  Commerce,  wants  to  talk  to  Mr.  Robert  Lynch,  President 
of  the  San  Francisco  Chamber  of  Commerce. 

Mr.  Beck:     All  right,  I  will  connect  him  right  away. 

Mr.  Robert  Newton  Lynch  (at  San  Francisco):  Hello,  Mr.  Kings- 
bury. 

Mr.  Kingsbury:  Hello,  Mr.  Lynch.  Mr.  Wilbur  Erskine,  the  Presi- 
dent of  the  Chamber  of  Commerce  of  Evansville,  Indiana,  wants  to  talk 
to  you. 

Mr.  Lynch:     I  will  be  very  delighted,  I  am  sure. 

Mr.  Wilbur  Erskine:     Hello,  Mr.  Lynch. 

Mr.  Lynch:     Good  evening,  Mr.  Erskine. 

Mr.  Erskine:  I  just  wondered  what  you  thought  of  being  President 
of  the  Chamber  of  Commerce  out  there. 

Mr.  Lynch:  Well,  I  consider  it  quite  an  honor.  We  have  a  very  fine 
organization  here.  It  is  a  very  great  honor  to  be  connected  with  it,  Mr. 
Erskine. 

Mr.  Erskine:  Well,  I  have  always  thought  very  well  of  it.  In  fact, 
I  think  it  is  the  greatest  honor  that  I  ever  had  bestowed  upon  me,  but 
since  this  Conference  here  I  feel  that  I  am  just  about  five  times  as  big  as 
I  ever  was. 

Mr.  Lynch:     Well,  I  congratulate  you. 

Mr.  Erskine:  We  have  some  very  live  ones  here  today.  Mr.  Kings- 
bury has  so  electrified  us  that  I  am  afraid  the  telephones  won't  work  in 
this  part  of  the  country  for  about  a  week. 

Mr,  Lynch:     Well,  that  would  be  too  bad. 

Mr.  Erskine:  And  as  I  spend  about  half  of  my  life  talking  over  the 
'phone  I  wonder  how  I  would  get  along  if  it  were  impossible  to  use  the 
'phone  for  the  purposes  of  my  business.  I  trust  that  this  will  not  have 
a  very  bad  effect  on  them. 

Mr.  Lynch:  Well,  it  will  be  very  bad  for  all  of  us  if  the  'phones 
should  go  out  of  service. 

Mr.  Erskine:  We  have  had  a  very  delightful  time  at  our  Confer- 
ence here.  We  hope  you  will  get  up  something  of  that  kind  in  your  com- 
munity out  there.     We  think  they  are  very  beneficial. 

Mr.  Lynch:  Well,  we  will  take  a  great  deal  of  interest  in  the  sub- 
ject that  you  have  had  up  for  consideration  and  will  be  very  glad  to  read 
over  the  proceedings. 

Mr.  Erskine:     Well,  good  night. 

Mr.  Lynch:     Good  night. 

Mr.  Kingsbury:     Hello.     I  want  Denver,  now. 

Mr.  Sachaffell:      This  is  Denver,  Mr,  Kingsbury. 

Mr.  Kingsbury:     Who  is  going  to  talk? 

Mr.  Sachaffell   (Denver) :     Mr.  Allison  Stacker,  the  State  Treasurer. 

Mr.  Stacker:     Hello,  Mr.  Kingsbury. 

Mr,  Kingsbury:  Good  evening,  Mr.  Stacker.  Mr.  Meeman,  editor 
of  the  Evansville  Press,  wants  to  say  a  few  words  to  you. 

Mr.  Stacker:     Oh,  I  shall  be  delighted  to  talk  to  him. 

Mr.  Edward  Meeman:  Five  hundred  men  and  women  assembled  in 
the  Central  States  Conference  on  Rail  and  Water  Transportation  send 
greetings  to  the  Rocky  Mountain  States.  We  have  gone  through  the 
transportation  problems  like  one  of  your  fine  roads  goes  through  the 
Rocky  Mountains, 

Mr,  Stacker:  Well,  we  would  be  very  glad  to  have  you  come  out 
and  enjoy  our  fine  roads  through  the  mountains.  This  is  the  state  treas- 
urer talking.     The  Governor  is  indisposed. 


H6  THE  CENTRAL  STATES  CONFERENCE         ^ 

Mr.  Meeman:  We  are  very  sorry  to  hear  that.  However,  we  will  be 
delighted  to  come  out  sometime.  We  are  having  a  very  good  time  here 
this  evening,  and  we  wish  you  could  be  here  with  us. 

Mr.  Stacker:  Well,  I  want  to  extend  to  you  the  greetings  of  the 
Chamber  of  Commerce  of  Denver,  of  which  I  was  formerly  president,  and 
also  to  extend  an  invitation  to  your  party  to  come  out  to  Denver  and 
enjoy  our  beautiful  roads  and  our  beautiful  scenery  and  some  of  our  hos- 
pitality. 

Mr.  Meeman:     Thank  you  very  much.     Good  night. 

Mr.  Stacker:      Good  night. 

Mr.  Kingsbury:     Hello.     I  want  Chicago. 

Mr.  Bell   (Chicago):     All  right,  Mr.  Kingsbury. 

Mr.  Kingsbury:  I  understand  we  are  to  talk  to  Mr.  Reynolds,  Presi- 
dent of  the  Continental  and  Commercial  National  Bank  of  Chicago,  but 
that  first  we  are  to  talk  to  Dr.  Harry  Pratt  Judson,  President  of  the 
University  of  Chicago. 

Mr.  Bell:     I  will  get  Dr.  Judson. 

Mr.  Kingsbury:  Mr.  Howard  Roosa,  editor  of  the  Evansville  Courier, 
wants  to  talk  to  Dr.  Judson. 

Mr.  Bell:     Here  is  Dr.  Judson. 

Dr.  Harry  Pratt  Judson  (at  Chicago):     Hello. 

Mr.  Kingsbury:      President  Judson? 

Dr.  Judson:     Yes,  sir. 

Mr.  Kingsbury:  I  want  to  introduce  Mr.  Howard  Roosa,  the  editor 
of  the  Evansville  Courier,  who  wants  to  say  a  few  words  to  you. 

Dr.  Judson:     I  shall  be  glad  to  hear  from  him. 

Mr.  Howard  Roosa:     Good  evening.  Doctor. 

Dr.  Judson:     Good  evening. 

Mr.  Roosa:  I  have  heard  your  voice  before.  Doctor.  I  heard  it  very 
frequently  when  I  was  at  the  University. 

Dr.  Judson:     Can  you  hear  me  clearly. 

Mr.  Roosa:  Yes,  sir.  President  Judson,  we  are  having  a  banquet 
here  of  about  five  hundred  men  and  women  assembled,  after  a  discussion 
for  two  days  regarding  the  transportation  problem.  We  all  wish  that  you 
would  say  something  to  us  here  tonight. 

Dr.  Judson:     Well,  are  you  all  there  and  can  you  all  hear  me? 

Mr.  Roosa:  Yes,  sir. 
Dr.  Judson:  It  is  now  nearly  a  quarter  of  a  century  since  you  were 
a  student  here.  At  that  time  we  had  only  five  hundred  students.  Now,  we 
have  over  five  thousand.  I  think  only  six  or  seven  hundred  registered  the 
first  year,  six  thousand  registered  this  year.  The  less  than  $2,000,000  on 
which  this  University  was  founded  have  become  more  than  $45,000,000. 

Now,  this  globe  is  very  good  to  live  in.  I  understand  that  you  are 
considering  transportation  problems  in  your  Conference  at  Evansville. 
We  must  remember  in  dealing  with  these  transportation  problems  that  wc 
must  not  look  but  one  year  ahead,  but  we  must  look  ahead  for  fifty  years 
or  more  and  plan  for  that  length  of  time.  The  progress  of  commercial 
activity  in  this  country  is  something  wonderful  but  no  commercial  activity 
of  any  kind  worth  mentioning  would  have  been  possible  without  transpor- 
tation. The  transporting  of  commodities  over  great  distances  with  great 
rapidity  and  at  low  cost  are  the  chief  essentials  of  commercial  activities 
and  have  made  possible  the  wonderful  development  of  our  Republic.  The 
capital  invested  in  the  transportation  facilities  of  the  country  will  be 
returned  many  fold.  Without  transportation  by  rail  and  by  water  into 
the  many  cities  of  the  country  there  never  could  have  been  any  orj^anized 
system  in  the  commercial  development  and  in  fact  the  cities  of  the  country 


THE  CENTRAL  STATES  CONFERENCE  117 

could  never  have  been  organized  and  developed  without  the  means  of 
rapid  transportation.  The  telegraph  and  the  telephone  made  possible  the 
railroads  and  the  boats  on  river  and  ocean,  and  it  is  only  by  a  perfect  co- 
ordination of  all  of  our  forces  and  sympathetic  co-operation  that  America 
will  be  able  to  retain  its  lead  in  the  world  of  commerce.  The  genius  of 
the  American  people  has  made  possible  our  talking  tonight  over  such  long 
distances  and  with  such  ease.  The  wonders  which  we  have  seen  are  but 
a  forerunner  of  the  wonders  yet  to  come.  Our  systems  of  transportation 
must  be  ready  in  a  moment  to  meet  the  conditions  of  a  new  age.  Wc  must 
look  forward  and  not  back. 

I  am  glad  to  greet  you  and  want  to  congratulate  you  on  the  success 
of  your  Conference. 

Mr.  Roosa:  In  behalf  of  the  five  hundred  men  and  women  assem- 
bled at  this  banquet,  I  want  to  thank  you.  Dr.  Judson,  very  much  and 
extend  to  your  our  felicitations  and  good  will. 

Dr.  Judson:  I  want  to  thank  you  very  much  and  thank  the  gather- 
ing there.     Good  night. 

Mr.  Eoosa:     Good  night. 

Mr.  George  M.  Reynolds   (at  Chicago)  :     Hello. 

Mr.  Kingsbury:  Hello,  Mr.  Reynolds.  This  is  Mr.  Kingsbury.  Mr. 
M.  S.  Sonntag,  President  of  the  American  Trust  &  Savings  Bank  of  Evans- 
ville,  Indiana,  wants  to  say  a  few  words  to  you,  Mr.  Reynolds. 

Mr.  Reynolds:     All  right.     I  would  be  glad  to  say  a  few  words  to  him. 

Mr.  Kingsbury:     Here  is  Mr.  Sonntag. 

Mr.  Sonntag:     How  are  you,  Mr.  Reynolds. 

Mr.  Reynolds:  Hello,  Mr.  Sonntag.  I  am  first  rate,  thank  you.  How 
are  you? 

Mr.  Sonntag:  All  right,  thank  you.  We  are  sorry  you  could  not  be 
with  us  tonight.  We  have  been  having  a  very  fine  meeting  for  the  past 
two  days  here. 

Mr.  Reynolds:  I  regret  very  much  that  I  could  not  be  with  you.  I 
want  to  congratulate  you,  however,  on  the  success  of  it,  but  I  congratu- 
late you  people  more  on  your  initiative  in  getting  up  a  Conference  of 
that  kind. 

Mr.  Sonntag:     Mr.  Reynolds. 

Mr.   Reynolds:      Yes. 

Mr.  Sonntag:  We  would  like  to  have  your  views  regarding  condi- 
tions for  the  coming  years  as  to  money  and  general  conditions. 

Mr.  Reynolds:  Well,  you  know,  there  is  an  old  saying  that  a  pro- 
phet is  without  honor  in  his  own  country.  Therefore,  I  am  rather  loath 
to  prophesy.  Our  reputation  as  a  prophet  usually  becomes  very  low  if  we 
don't  hit  is  just  right.  We  don't  know  what  is  liable  to  happen.  We 
some  times  are  up  against  it  when  we  are  asked  whether  we  can  prove 
whether  we  are  right  or  not.  The  conditions  in  this  country,  of  course, 
are  very  unusual.  We  are  in  the  midst  of  probably  the  greatest  prosperity 
that  the  nation  as  a  whole  ever  enjoyed,  superinduced  very  largely  by  the 
conflict  abroad  and  the  enormous  exports  which  we  have  been  sending 
over  there  and  the  great  imports  of  gold  and  wealth  in  its  stead.  Now, 
almost  every  line,  directly  or  indirectly,  has  felt  a  benefit  or  a  collateral 
benefit  of  this  unusual  prosperity.  I  don't  think  this  is  true,  however,  of 
the  banks.  The  banks  have  been  penalized  rather  than  having  felt  any 
benefit  from  this  business,  because  of  the  great  influx  of  gold  and  wealth 
and  the  little  demand  for  money.  I  just  want  to  say  that  what  is  likely 
to  happen,  what  is  in  store  for  us  here,  depends  a  great  deal  on  the  trend 
of  the  war  abroad. 

Mr.  Sonntag:  What,  in  your  opinion,  would  be  the  effect  on  this 
country  if  peace  were  declared  in  Europe  at  this  time? 


jjg  THE  CENTRAL  STATES  CONFERENCE 

Mr  Reynolds:  Well,  I  think  we  are  getting  a  little  forecast  of  what 
the  effect  might  be  on  this  country  by  the  effect  that  the  German  note  had 
on  the  stock  market  in  New  York  within  the  last  three  or  four  days.  Now, 
I  think  that  peace  would  come  as  a  shock  and  probably  would  shock  the 
markets  I  can't  see  any  reason  for  any  great  disturbance.  We  would 
all  have  to  readjust  ourselves  to  the  new  conditions  if  peace  were  de- 
clared Personallv,  I  believe  that  in  the  long  run  we  will  enjoy  just  as 
much  if  not  more  prosperity  than  we  have  had  in  the  past,  and  wn  would 
get  away  from  what  many  people  call  blood  money  prosperity,  as  it  has 
been  called  during  the  last  two  years.  The  fear  and  the  lack  oi  confi- 
dence which  is  reflected  in  the  stock  market,  the  stock  brokers  an  New 
York  City,  is  a  thing  that  has  got  to  come  when  the  war  ends.  Immediate- 
ly following  that,  however,  confidence  will  take  the  place  of  fear.  We 
will  begin  then  to  get  on  a  sound  basis  and  while  there  will  be  a  great 
many  problems  raised  I  think  the  American  business  man  is  cool-headed 
enough  to  solve  them.  I  am  sure  that  the  American  people  will  soon  re- 
adjust themselves  to  the  new  conditions. 

Mr.  Sonntag:     Well,  thank  you,  Mr.  Reynolds.-   Good  night. 

Mr.  Reynolds:     Good  night. 

Mr.  Kingsbury:     Now,  we  want  to  go  to  Boston. 

Mr.  Bell:     All  right,  hcie  is  Boston. 

Boston  Operator:      This  is  Boston. 

Mr.  Kingsbury:     Is  Governor  Coolidge  there? 

Boston  Operator:     Yes,  sir. 

Lieutenant-Governor  Coolidge  (at  Boston) :     This  is  Mr.  Coolidge. 

Mr.  Kingsbury:  This  is  Mr.  Kingsbury,  Governor,  Mr.  Charles  F. 
Hartmetz  wants  to  say  a  word  to  you.  We  are  glad  to  hear  from  you. 
Governor.     I  will  put  Mr.  Hartmetz  on  the  line. 

Mr.  Coolidge:     All  right. 

Mr.  Hartmetz:     Good  evening,  Governor. 

Mr.  Coolidge:     Good  evening.     How  is  the  weather  out  there? 

Mr.  Hartmetz:  It  is  pretty  cold  out  here  now,  but  we  are  interested 
in  a  proposition  of  much  more  importance  than  the  weather,  the  proposi- 
tion of  transportation,  the  problem  that  is  connected  with  the  high  cost  of 
living. 

Mr.  Coolidge:  Yes,  sir;  it  is  a  very  important  problem.  I  want  to 
congratulate  you  on  the  success  of  your  meeting.  I  am  as  interested  as 
any  man  in  the  country's  prosperity.  We  regard  our  welfare  as  going 
hand  in  hand  with  the  development  of  the  railways  and  waterways.  We 
should  use  all  our  energies,  bend  all  our  efforts  towards  the  building  up 
of  the  railways  and  waterways.  We  need  them,  we  need  them  in  order 
to  maintain  our  prosperity. 

Mr.  Hartmetz:  It  is  a  very  big  question  and  a  very  big  proposition 
and  we  have  been  discussing  it  here  from  all  angles. 

Mr.  Coolidge:     Yes,  sir.     I  hope  you  work  it  out  satisfactorily. 

Mr.  Hartmetz:  We  would  like  to  have  had  you  with  us.  We  have 
had  a  very  successful  Conference. 

Mr.  Coolidge:  Yes,  I  heard  so.  I  wish  you  success  now,  and  extend 
to  you  the  best  wishes  and  greetings  of  the  season. 

Mr.  Hartmetz:  Thank  you  very  much.  Governor,  we  are  very  glad 
to  have  heard  from  you. 

Mr.  Coolidge:     Goodbye. 

Mr.  Hartmetz:     Goodbye. 

Mr.  Kingsbury:     Hello,  Boston. 

Boston  Operator:     Mr.  Weed  is  on  the  line. 


THE  CENTRAL  STATES  CONFERENCE  119 

Mr.  Kingsbury:  Mr.  Weed  is  the  President  of  the  Boston  Chamber 
of  Commerce, 

Mr.  DeJong  (Vice-President  Evansville  Chamber  of  Commerce): 
Hello,  Mr.  Weed. 

Mr.  Weed  (at  Boston) :     Hello. 

Mr.  DeJong:  This  is  Mr.  DeJong  of  Evansville,  Indiana.  I  am 
speaking  for  about  five  hundred  live  wires  who  are  assembled  here  at 
the  conclusion  of  the  Central  States  Conference  on  Rail  and  Water  Trans- 
portation, held  at  Evansville,  Indiana.  If  this  telephone  had  a  mirror 
attachment  to  it  as  well  as  being  long  distance,  I  would  bring  you  face 
to  face  with  five  hundred  live  wires.     How  is  the  weather  out  your  way? 

Mr.  Weed:     Well,  it  is  snowing  pretty  hard  just  now. 

Mr.  DeJong:     Well,  it  has  been  snowing  here,  too. 

Mr.  Weed:  We,  of  the  Chamber  of  Commerce  of  Boston,  Massachu- 
setts, want  to  send  congratulations  to  the  Evansville  Chamber  of  Com- 
merce. We  congratulate  you  and  appreciate  the  work  you  have  under- 
taken. Whatever  you  may  be  able  to  accomplish  in  the  way  of  water- 
ways or  railroads  we  hope  will  be  for  the  best  and  we  know  that  your 
views  down  there  will  be  respected  by  the  government  in  its  regulation 
of  the  railroad.  We  believe  that  the  national  government  should  be  given 
this  authority  and  not  that  any  state  should  have  the  authority  to  regu- 
late for  interstate  commerce,  which  it  does  when  it  imposes  regulations 
upon  an  interstate  carrier.  We  have  the  commerce  of  the  world  at  our 
doors.  We  believe  that  we  can  keep  this  commerce,  that  we  can  go  into 
the  markets  of  the  world,  and  that  we  can  get  prosperity  into  the  whole 
country  and  keep  it  there  if  we  can  get  the  proper  transportation  for  our 
raw  materials  and  manufactured  goods.  To  get  prosperity  into  the  whole 
country  we  have  got  to  go  to  the  markets  of  the  world.  The  only  way 
it  can  be  developed  is  by  the  railroads.  The  telephone  company,  by  its 
marvelous  service,  has  done  its  part.  The  people  of  this  country  must 
be  given  the  right  of  collective  bargaining.  The  states  of  this  country 
must  have  proper  transportation  facilities  or  we  will  never  be  able  to  at- 
tain the  place  that  America  is  properly  entitled  to.  Much  obliged  to  you. 
Good  night  to  you  all. 

Mr.  DeJong:     Good  night. 

Mr.  Kingsbury:      Hello,  I  want  New  York  Now.     Hello,  New  York. 

New  York  Operator:      Hello,  this  is  New  York. 

Mr.  Kingsbury:     I  want  to  speak  to  Mr.  Bethel. 

New  York  Operator:     All  right,  here  you  are. 

Mr.  Kingsbury:  (To  the  audience)  I  am  going  to  speak  to  my  boss. 
I  hope  you  won't  notice  any  change  in  my  voice.  Hello,  Mr.  Bethel.  Is  this 
Mr.  Bethel? 

Mr.  Union  N.  Bethel  (Senior  Vice-President  American  T.  &  T.  Co.  at 
New  York) :  (Mr.  Bethel  was  born  and  lived  many  years  at  Newburgh, 
ten  miles  from  Evansville.)     Hello,  Mr.  Kingsbury. 

Mr.  Kingsbury:     How  are  you,  sir? 

Mr. 'Bethel:     Pretty  well,  thank  you.     How  are  you  tonight ?v 

Mr.  Kingsbury:  First  rate,  thank  you..  We  are  having  a  splendid 
time.  I  am  down  here  with  your  old  friends  and  neighbors.  They  are 
specially  interested  and  were  very  sorry  you  could  not  be  here.  I  haven't 
any  apologies  to  offer  for  you  for  not  being  here.  I  have  left  that  to  you. 
Mr.  J.  C.  Johnson,  Vice-President  of  the  Citizens  National  Bank  of  Evans- 
ville, wants  to  say  a  few  words  to  you,  Mr.  Bethel. 

Mr.  Bethel:     Hello,  Mr.  Johnson. 

Mr.  Johnson:     Hello,  Mr.  Bethel. 

Mr.  Bethel:     How  are  you,  sir? 


120  THE  CENTRAL  STATES  CONFERENCE 

Mr  Johnson:  Very  well,  thank  you,  sir.  I  want  to  extend  greetings 
to  you,  sir,  on  behalf  of  the  Central  States  Conference  on  Rail  and  Water 
Transportation  now  in  session  in  the  city  of  Evansville.  I  want  to  know 
if  you  have  some  message  to  transmit  to  this  Conference. 

Mr.  Bethel:     I  don't  know  that  I  have  any  message,  Mr.  Johnson.     I 
would  suggest  to  the  people  of  Evansville  who  had  the  honor  to   hold 
this  first  Conference  in  their  midst,  that  they  did  something  of  which  they^ 
ought  to  be  proud.     I  am  proud  of  the  fact  that  I  have  lived  in  Evans-*' 
ville.     I  was  born  near  there  on  the  banks  of  the  beautiful  Ohio  at  a  little 
place  called  Newburgh. 

Mr.  Johnson:      Oh,  yes,  Evansville  is  a  suburb  of  Newburgh. 

Mr.  Bethel:  As  I  say,  I  am  very  glad  that  Evansville  had  the  honor 
of  holding  that  first  Conference.  I  have  been  back  there  a  great  deal  since 
my  boyhood.  I  spent  my  boyhood  there  and  I  want  to  say  that  there  is  no 
state  in  the  country  that  can  compare  with  Indiana.  I  hope  you  will 
be  exceedingly  successful  in  all  you  do. 

Mr.  Johnson:  Thank  you  very  much.  Your  friend,  Mr.  Brown,  from 
Atlanta,  Georgia,  is  here. 

Mr.  Bethel:     Yes. 

Mr.  Johnson:  He  has  been  sitting  beside  me  here  at  the  banquet.  He 
sends  his  greetings  to  you. 

Mr.  Bethel:     Will  you  please  thank  Mr.  Brown  very  kindly? 

Mr.  Johnson:     Yes,  sir. 

Mr.  Bethel:     What  family  of  Johnsons  do  you  belong  to? 

Mr.  Johnson:     What  family  do  I  belong  to? 

Mr.  Bethel:      Yes. 

Mr.  Johnson:  Oh,  there  is  a  vast  army  of  Johnsons  in  this  country 
and  I  don't  know  just  what  family  I  belong  to. 

Mr.  Bethel:     I  am  a  real  Hoosier.     Where  do  you  come  from? 

Mr.  Johnson:     I  come  from  Maryland. 

Mr.  Bethel:     Maryland? 

Mr.  Johnson:  Yes;  I  am  not  a  Hoosier  by  birth.  I  am  a  Hoosier 
by  preference. 

Mr.  Bethel:  I  take  great  pleasure  in  hearing  from  you.  I  am  very 
proud  of  the  fact  that  I  am  from  the  Hoosier  state.  Now,  I  belong  to  that 
hardy  race  of  people  that  came  down  and  settled  in  that  great  north- 
western territory  north  of  the  Ohio  river. 

Mr.  Johnson:     Yes. 

Mr.  Bethel:  That  gave  to  the  world  such  men  as  Abraham  Lincoln.  I 
was  like  Lincoln  in  one  respect.  I  spent  my  boyhood  in  the  same  coun- 
try that  he  did.  In  that  one  respect  I  was  like  him.  I  am  not  a  contem- 
porary of  his,  though. 

Mr.  Johnson:     No,  I  should  hope  not. 

Mr.  Bethel:     But  I  was  a  contemporary  of  George  Clifford. 
I  didn't  know  you  were  quite  so  old  a  man. 
Yes. 

He  is  here  tonight. 
Give  him  my  love. 

Give  him  your  love,  yes. 
And  Mark  Sonntag. 

Mark  Sonntag? 
Yes. 

He  is  here  tonight,  too. 


Mr. 

Johnson: 

Mr. 

Bethel: 

Mr. 

Johnson: 

Mr. 

Bethel: 

Mr. 

Johnson: 

Mr. 

Bethel: 

Mr. 

Johnson: 

Mr. 

Bethel: 

Mr 

'.  Johnson 

THE  CENTRAL  STATES  CONFERENCE  121 

Mr.  Bethel:     Give  him  my  love,  too. 

Mr.  Johnson:  He  has  just  finished  talking  to  Mr.  Reynols  in  Chi- 
cago. 

Mr.  Bethel:  Yes,  those  are  the  fellows  that  I  know.  Do  you  know 
Will  Warren? 

Mr.  Johnson:      Yes. 

Mr.  Bethel:     Well,  he  is  a  cousin  of  mine,  not  by  blood. 

Mr.  Johnson:     Mr.  Warren  is  here. 

Mr.  Bethel:     Mr.  Warren  there? 

Mr.  Johnson:     Yes,  Mr.  Warren  is  sitting  a  few  feet  from  me. 

Mr.  Bethel:     I  would  like  to  talk  to  him. 

Mr.  Johnson:  He  is  right  here.  Just  as  soon  as  he  comes  he  will 
speak  to  you,  but  before  he  does  I  want  to  wish  you  a  merry  Christmas 
and  extend  to  you  the  greetings  of  the  season. 

Mr.  Bethel:     All  right,  thank  you. 

Mr.  William  Warren:      Hello,  Union. 

Mr.  Bethel:     Hello,  Will.     How  are  you  tonight? 

Mr.  Warren:      Fine.     How  are  you? 

Mr.  Bethel:     Fine. 

Mr.  Warren:  I  wish  you  could  have  been  up  here  tonight.  We  cer- 
tainly had  a  fine  time, 

Mr.  Bethel:  I  wish  so  too.  I  asked  Mr.  Kingsbury  to  bring  my  re- 
grets because  I  couldn't  be  there,  it  was  absolutely  impossible. 

Mr.  Warren:  Well,  he  did  that,  Un.  He  held  up  your  end  very 
nicely  indeed. 

Mr.  Bethel:     That  is  very  nice.  Bill. 

Mr.  Warren:     Well,  I  wish  you  a  very  merry  Christmas,  Union. 

Mr.  Bethel:  Thank  you.  Will.  I  am  awfully  glad  to  hear  your  voice. 
Are  you  all  well  at  home? 

Mr.  Warren:      Yes.     Good  night,  Un. 

Mr.  Kingsbury:     Good  night,  Mr.  Bethel. 

Mr.  Bethel:     Good  night,  Mr.  Kingsbury. 

Mr.  Kingsbury:      Hello!      New  York.     Is  Mr.  Morgan  there? 

Mr.  William  Fellows  Morgan:  (President  Merchants  Association  of 
New  York,  at  New  York.)      Yes,  sir. 

Mr.  Kingsbury:      Hello,  Mr.  Morgan. 

Mr.  Morgan:      Hello,  Mr.  Kingsbury. 

Mr.  Kingsbury:  Mr.  Robert  A.  Andres,  President  of  the  Retail  Mer- 
chants Bureau  and  director  of  the  Evansville  Chamber  of  Commerce  is 
on  the  line  and  wants  to  say  a  few  words  to  you. 

Mr.  Andres:     Hello,  Mr.  Morgan. 

Mr.  Morgan:     Hello,  Mr.  Andres.     How  are  you  this  evening? 

Mr.  Andres:  Very  fine,  thank  you.  The  Central  States  Conference 
on  Rail  and  Water  Transportation  sends  you  greetings.  The  delegates 
are  assembled  here.  They  number  very  nearly  five  hundred  and  we  re- 
great  very  much  that  you  could  not  accept  our  invitation  to  be  present. 
Have  you  something  to  say  to  us  relative  to  the  discussion  that  has  been 
going  on  during  the  past  feAV  days,  a  message  that  would  be  of  interest 
to  us? 

Mr.  Morgan:  I  don't  think  I  have  any  message  that  would  be  of 
particular  importance  at  this  time.  I  think  you  have  heard  both  sides 
of  the  question  and  I  shall  merely  send  you  the  greetings  of  the  season. 
I  have  been  very  glad  I    have  been  able  to  talk  to  you.     It  seems  won- 


122  THE  CENTRAL  STATES  CONFERENCE 

derful  to  me  to  sit  here  and  talk  to  you  almost  a  thousand  miles  away. 
Good  night. 

Mr.  Andres:     Good  night.     Thank  you  very  much,  sir. 

Mr.  Kingsbury:     Good  night. 

Mr.  Morgan:     Good  night. 

Mr.  Kingsbury:     Hello,  Mr.  Bell.     We  want  to  get  Washington  now. 

Mr.  Bell:  Hello,  Mr.  Kingsbury.  We  will  get  Washington  for  you 
right  away. 

Mr.  Kingsbury:      Who  is  this  talking? 

Operator:  This  is  the  testing  station.  We  are  getting  Secretary 
Daniel's  residence. 

Hon.  Josephus  Daniels,  (Secretary  of  the  Nav>')  (at  Washington)  : 
Hello. 

Mr.  Kingsbury:  Hello,  Mr.  Secretary.  This  is  Mr.  Kingsbury  of 
the  telephone  company,  Mr.  Secretary.     How  are  you? 

Hon.  Josephus  Daniels:     Very  fine,  thank  you.     How  are  you? 

Mr.  Kingsbury:  First  rate.  I  would  like  you  to  say  a  few  words  to  Mr. 
W.  H.  McCurdy,  President  of  the  Hercules  Buggy  &  Gas  Engine  Company, 
of  Evansville,  Indiana. 

Hon.  Josephus  Daniels:     All  right. 

Mr.  W.  H.  McCurdy:     Hello,  Mr.  Secretary. 

Hon.  Josephus  Daniels:     How  are  you  out  there? 

Mr.  McCurdy:     Pretty  well.     How  are  you  in  Washington? 

Hon.  Josephus  Daniels:     All  right. 

Mr.  McCurdy:  We  are  having  a  fine  time  here.  We  are  now  assem- 
bled in  the  Central  States  Conference  on  Rail  and  Water  Transporta- 
tion and  we  have  had  a  very  successful  meeting.  We,  of  course,  missed 
you.  We  hope  to  be  more  successful  another  time.  How  are  things  over 
in  Washington? 

Hon.  Josephus  Daniels:      Things  are  very  quiet  here. 

Mr.  McCurdy:  I  happen  to  have  been  made  chairman  of  a  commit- 
tee to  secure  the  armor  plate  plant  for  Evansville  and  I  hope  soon  to  meet 
you  as  well  as  other  Washington  officials,  for  the  purpose  of  laying  before 
you  all  of  our  claims  as  impressively  as  possible. 

Hon.  Josephus  Daniels:  Well,  we  expect  to  send  a  committee  out  to 
see  what  you  have,  what  kind  of  territory  3^ou  have. 

Mr.  McCurdy:  That  will  be  all  right.  You  will  send  the  committee 
here  to  Evansville? 

Hon.  Josephus  Daniels:     Yes. 

Mr.  McCurdy:  Well,  we  will  give  them  a  royal  welcome  and  show 
them  the  advantages  of  locating  the  armor  plate  plant  in  our  community. 

Hon.  Josephus  Daniels:     Well,  I  know  they  will  have  a  good  time. 

Mr.  McCurdy:  Mr.  Secretary,  I  hope  you  will  take  advantage  of  that 
opportunity  and  come  along  with  them. 

Hon.  Josephus  Daniels:  Well,  I  hope  I  can  do  so.  I  won't  promise, 
but  I  will  if  I  can. 

Mr.  McCurdy:  That  will  be  very  good.  Do  the  best  you  can  for  us. 
Good  night. 

Hon.  Josephus  Daniels:     Good  night. 

Mr.  Kingsbury:      Hello. 

Washington  Operator:     This  is  Secretary  Lansing's  residence. 

Mr.  Kingsbury:      All  right.     Hello. 

Hon.  Robert  Lansing:     Hello. 


THE  CENTRAL  STATES  CONFERENCE  123 

Mr,  Kingsbury:      Hello,  Secretary  Lansing? 

Hon.  Robert  Lansing:     Yes. 

Mr.  Kingsbury:  Mr.  Samuel  L.  Orr  of  Evansville,  Indiana,  wants  to 
say  a  few  words,  to  you,  sir. 

Hon.  Robert  Lansing:     All  right. 

Mr.  Samuel  L.  Orr:      Hello,  Secretary  Lansing. 

Hon.  Robert  Lansing:     Hello,  Mr.  Orr. 

Mr.  Orr:  We  have  had  a  most  successful  conference  and  I  am  sure 
that  you  will  be  interested  to  hear  how  much  we  have  all  been  benefited 
and  I  believe  that  the  Conference  will  do  a  great  good.  As  you  are  a 
citizen  of  Evansville  by  marriage  we  would  like  to  have  you  honor  us 
with  a  few  remarks.     Have  you  a  message  to  send  to  us? 

Hon.  Robert  Lansing:     Do  you  hear  me? 

Mr.  Orr:      Yes. 

Hon.  Robert  Lansing:  I  want  to  express  our  very  best  wishes  for  a 
successful  outcome  of  your  Conference.  The  President  is  very  much  in- 
terested in  your  deliberations.  We  wish  to  congratulate  the  great  cen- 
tral states  on  their  industry  and  progress.  While  I  cannot  be  with  you 
in  person  I  am  with  you  in  spirit.  While  I  cannot  meet  with  you  in  per- 
son I  can  do  so  across  a  thousand  miles  of  wire.  I  believe  that  the  prob- 
lems both  in  transportation  and  along  other  lines  will  be  solved  by  mature 
deliberation.  The  railroads  and  waterways  are  the  channels  of  commerce 
and  are  the  great  arteries  of  development,  and  their  perfection  in  these 
complex  times  is  well  worthy  of  consideration.  I  wish  to  express  my 
highest  regard  for  the  city  of  Evansville  in  undertaking  a  conference  of 
this  natiu-e.  I  Avish  you  success  in  your  entei-prise  and  want  to  congratu- 
late you  upon  your  conference. 

Mr.  Orr:     We  thank  you  very  much,  Mr.  Secretary. 

Hon.  Robert  Lansing.     Thank  you. 

Mr.  Orr:  Will  you  please  extend  to  your  good  wife,  Mrs.  Lansing,  the 
affectionate  greetings  of  Evansville? 

Hon.  Robert  Lansing:     I  will  be  very  glad  to  do  so.     Good  night. 

Mr.  Orr:     Good  night. 

Mr.  Kingsbury:      Hello. 

Washington  Operator:  This  is  Washington.  This  is  Vice-Presi- 
dent Marshall's  residence.     Are  you  ready  for  him? 

Mr.  Kingsbury:     Yes,  we  are  ready. 

Hon.  Thomas  R.  Marshall:     Hello. 

Mr.  Kingsbury:  Hello,  Mr.  Vice-President.  This  is  Kingsbury  of 
the  Bell  Telephone  Company.  Mr.  Boehne,  ex-Congressman  from  Indiana, 
would  like  to  speak  to  you.     Mr.  Boehne  is  right  here. 

Hon.  John  W.  Boehne:     Hello.     Is  this  Mr.  Marshall? 

Hon.  Thomas  R.  Marshall:     Yes.     Hello,  Mr.  Congressman. 

Hon.  J.  W.  Boehne:     How  are  you  to-day? 

Hon.  Thomas  R.  Marshall:  Very  well,  sir.  Is  the  Conference  in 
progress  now? 

Hon.  J.  W.  Boehne:  The  Central  States  Conference  on  Rail  and 
Water  Transportation  has  been  in  session  two  days  and  they  send  their 
greetings  to  the  Vice-President  of  the  United  States.  They  would  like  to 
have  you  say  a  word  to  them.  There  are  500  guests  here,  connected  by 
telephone,  who  are  enjoying  his  treat  through  the  courtesy  of  the  Bell 
Telephone  Company.  We  have  just  had  a  most  elaborate  banquet  here. 
Now,  we  would  like  to  hear  a  few  words  from  you. 

Hon.  Thomas  R.  Marshall:  Mr.  Congressman,  t  am  a  little  em- 
barrassed.    I  don't  know  just  what  to  say.     I  express  my  personal  appre- 


J24  THE  CENTRAL  STATES  CONFERENCE 

elation  to  all  of  the  members  present  of  the  great  task  that  they  have  had 
before  them,  and  I  want  to  congratulate  the  city  of  Evansville  for  its 
initiative  in  undertaking  such  a  movement  as  that.  The  question  has 
been  particularly  acute  in  the  United  States  for  the  last  number  of  months 
and  we  have  been  very  much  occupied  with  the  discussion  of  the  great 
question  of  transportation.  That  is  one  of  the  great  problems  confront- 
ing the  American  people  and  has  to  do  with  and  has  reference  to  the  high 
cost  of  living.  The  high  cost  of  living  is  partly  induced  by  the  fact  that 
we  have  the  people  in  one  place  and  the  products  in  another.  The  great 
difficulty  is  to  bring  them  closer  together.  The  question  is  whether  we 
can  bring  the  people  to  the  products  or  whether  the  products  can  be 
brought  to  the  people.  This  is  not  only  an  economic  problem,  but  is  also 
a  social  problem,  to  the  solution  of  which  the  members  of  your  Confer- 
ence do  well  to  lend  their  best  efforts,  their  best  energy  and  their  best 
thoughts.  The  only  thing  I  want  to  say  is  that  the  more  you  can  put  into 
the  appropriations  for  the  improvements  of  the  rivers  and  waterways 
of  this  country  the  better  it  will  be  for  all  concerned,  because  in  that 
way  we  will  be  able  to  relieve  part  of  the  congestion.  There  can  be  no 
question  of  the  expediency  of  improving  our  rivers.  The  present  condi- 
tion of  affairs  does  not  arise  from  the  fact  that  river  transportation  cannot 
be  made  possible  and  valuable  to  the  people  of  this  country,  but  it  does 
arise  from  the  fact  that  it  cannot  be  made  possible  and  valuable  to  the 
people  of  the  country  under  the  present  conditions  of  the  law.  So  all  I 
can  ask  of  the  government  of  the  United  States  is  to  permit  the  railroads 
to  meet  and  to  lower  the  rates  of  transportation.  We  must  do  everything 
to  arouse  enthusiasm  over  the  improvements  of  the  rivers  of  this  country. 

,  It  is  perfectly  natural  that  the  people  will  ship  by  rail  and  not  by 
water,  because  of  the  greater  expediency  at  this  time  when  the  railroads 
are  used  than  when  the  waterways  are  used  in  their  present  condition.  It 
is  also  perfectly  natural  that,  when  the  waterways  are  improved,  with  the 
cheaper  rates  they  will  afford,  whatever  traffic  can  be  sent  over  them  will 
go  via  the  waterways  rather  than  by  the  railways  which  parallel,  unless 
the  rates  on  the  two  are  equal.  It  seems  to  me,  therefore,  that  there 
must  be  some  adjustment  made  between  the  railroads  and  the  rivers  of 
this  country,  that  they  must  be  co-ordinated  and  that,  either  through  the 
instrumentality  of  the  states  or  the  instrumentality  of  the  general  gov- 
ernment, there  must  be  a  control  somewhere  of  the  rivers  and  the  rail- 
roads of  his  country;  and  that  there  must  be  power  given  to  fix  their  se- 
curities and  to  enable  us  to  use  as  much  as  we  possibly  can  the  great 
natural  highways  of  the  country,  the  mighty  rivers  that  flow  in  all  direc- 
tions through  this  United  States  of  America.  Now,  I  am  an  old-fashioned 
democrat.  I  don't  want  to  take  away  from  the  various  states  of  this 
Union  any  of  the  rights  that  belong  to  them,  but  it  seems  to  me  that  it 
would  be  to  the  advantage  of  the  various  states  as  well  as  to  the  people 
of  the  whole  country  that  there  be  one  controlling  body  over  the  railroads 
of  the  whole  country.  I  hope  that  the  conditions  of  America  Avill  not 
necessarily  be  changed  by  the  new  conditions  in  the  markets  of  the  world, 
but  it  is  a  fact  that,  unless  the  various  states  in  this  Union  will  assume 
the  responsibilities  which  they  owe  to  all  of  the  states,  and  take  the 
necessary  steps  to  induce  the  people  to  use  both  the  railroads  and  the 
waterways  in  the  transportation  of  not  only  the  food  products,  but  all  of 
the  manufactured  products  of  all  of  the  states  of  this  Union,  there  must 
be  one  central  controlling  body,  and  that  the  different  states  acquiesce 
in  the  opinion  of  that  commission  which  would  have  the  control  over  all 
the  waterways  and  railways. 

Now,  I  am  most  delighted  to  know  that  in  the  very  grand  and  pros- 
perous city  of  Evansville  there  has  been  held  a  Conference,  the  members 
of  which  are  firmly  convinced  of  the  necessity  of  studying  this  problem 
which  confronts  the  whole  nation,  and  that  that  Conference  has  been 
called  with  that  one  object  in  view.  I  trust  that  that  Conference  has 
heard  all  sides  of  the  question,  and  that  they  will  give  careful  considera- 


THE  CENTRAL  STATES  CONFERENCE  125 

tion  to  the  questions  involved  before  any  action  is  taken,  and  that  what- 
ever action  is  taken  will  be  for  the  best  interests  of  all  the  people  of  this 
country.  Now,  for  myself,  I  would  be  opposed  to  any  legislation  unless 
that  legislation  could  be  backed  up  by  the  deliberate  judgment  of  all  the 
people.  I  believe  in  a  very  large  amount  of  discussion  on  any  subject. 
I  doubt  if  the  views  of  all  sides  can  be  expressed  by  any  one  party  or 
by  anybody  and  everybody  who  may  happen  to  be  at  the  convention.  I 
hope  that  no  one  will  refrain  from  speaking  for  fear  of  not  meeting 
with  the  approval  of  some  in  the  convention,  biit  that  everybody  will  talk. 
I  trust  that  your  deliberations,  which  will  no  doubt  become  known  to  all 
of  the  people  of  all  of  the  states  of  this  country,  and  which  will  no  doubt 
be  crystalized  into  some  set  of  resolutions,  will  help  to  solve  for  the 
American  people  the  great  transportation  problem  of  this  country, 

Hon.  J.  W.  Boehne:     Mr.  Marshall. 

Hon.  Thomas  R.  Marshall:      Yes,  sir. 

Hon.  J.  W.  Boehne:  I  would  like  to  say  that  I  had  the  great  pleasure 
of  talking  to  you  tonight  as  though  I  were  with  you  in  person,  instead 
01  a  thousand  miles  apart,  and  I  want  to  extend  to  you  and  Mrs.  Marshall 
the  best  wishes,  not  only  of  myself  but  of  my  entire  family.  How  is  Mrs. 
Marshall? 

Hon.  Thomas  R.  Marshall:  She  is  well,  but  not  strong,  Mr.  Congress- 
man; and  I  hope  you  will  extend  to  the  members  of  the  Conference  my  best 
wishes  and  greetings,  and  explain  to  them  that  it  was  somewhat  difficult 
to  speak  over  the  telephone,  that  my  views  with  reference  to  transporta- 
tion are  not  fixed,  but  that  they  are  only  tentative.  I  am  at  a  loss  to  know 
what  we  may  do  in  this  great  problem.  I  want  you  to  give  my  greetings 
to  all  members  of  your  good  family,  to  all  the  people  of  Evansville,  and 
the  delegates  to  the  convention. 

Hon.  J.  W.  Boehne:  Thank  you,  very  much.  I  wish  to  say  that  we 
would  like  to  have  you  extend  to  the  President  the  greetings  of  this  con- 
vention, and  to  thank  him  in  behalf  of  this  convention  assembled  for  his 
kind  message  to  us.  I  hope  to  pay  my  personal  respects  to  him  and  to 
you  as  well  as  to  the  others  in  Washington  within  a  very  short  time. 

Hon.  Thomas  R.  Marshall:  I  will  gladly  convey  your  kind  greet- 
ings to  the  President,  and  I  want  to  thank  you  very  much  for  your  well 
wishes. 

Hon.  J.  W.  Boehne:     Well,  good  night  and  good  luck  to  you. 

Hon.  Thomas  R.  Marshall:     Good  night. 

Mr.  Kingsbury:  Hello.  Give  me  the  transcontinental  with  San 
Francisco. 

Mr.  Hunter:  (San  Francisco.)  This  is  San  Francisco,  Hunter  speak- 
ing, Mr,  Kingsbury. 

Mr.  Kingsbury:  Hello,  Mr.  Hunter.  Have  you  got  the  window  open 
there? 

Mr.  Hunter:      (San  Francisco.)     Yes. 

Mr.  Kingsbury:     How  is  the  Pacific  tonight? 

Mr.  Hunter:  (San  Francisco.)  The  Pacific  is  rather  quiet  but  there 
are  some  waves  on  it. 

TVIr.  Kingsbury:  I  don't  think  it  is  wavy  enough  tonight  for  us  to 
hear.     When  are  you  ready  for  us? 

Mr.  Hunter:      (San  Francisco.)     Right  now,  anytime. 

Mr.  Kingsbury:  All  right.  Let  us  have  the  roar  of  the  Pacific  and 
we  will  have  moving  pictures  to  show  where  the  roar  comes  from. 

Mr.   Hunter:      (San  Francisco.)      All  right. 

Mr.  Kingsbury:  (To  audience.)  Pictures  will  be  thrown  on  the 
screen  to  show  where  the  roar  is  taken  in  the  Pacific,  down  at  the  Cliff 


126  THE  CENTRAL  STATES  CONFERENCE 

House  in  San  Francisco.  A  telephone  receiver  Is  placed  on  the  pier  at 
the  Cliff  House.     Can  you  hear  the  roar  of  the  waves? 

Moving  pictures  were  shown,  showing  the  Pacific  coast  and  the 
waves  breaking  on  the  shore,  while  the  roar  of  the  waves  was  distinctly 
heard  by  the  conference  over  the  telephone. 

Mr.  Kingsbury:     Hello. 

Mr.  Hunter:     (San  Francisco.)     Hello,  Mr.  Kingsbury. 

Mr.  Kingsbury:      Now,  will  you  give  us  the  Star  Spangled  Banner? 

The  Star  Spangled  Banner  was  played  in  San  Francisco  and  heard 
by  the  Conference  over  telephones. 

Mr.  Kingsbury:     Hello,  San  Francisco. 

Mr.  Hunter:      (San  Francisco.)     This  is  San  Francisco. 

Mr.  Kingsbury:     Good  night,  Mr.  Hunter. 

Mr.  Hunter:      (San  Francisco.)      Good  night,  Mr.  Kingsbury. 

"Good  night"  was  then  said  to  each  city  on  the  line  across  the  con- 
tinent. 

Mr.  Kingsbury:     Last,  but  not  least,  Hello  Evansville! 

Mr.  Gibbs:  (Evansville.)  This  is  Evansville,  Mr.  Kingsbury.  Good- 
night. 

Mr.  Kingsbury:  Good  night.  Thank  you  very  much.  (Continued 
applause.) 

Mr.  Henry  C.  Murphy:  Mr.  Toastmaster,  gentlemen  of  the  Confer- 
ence and  ladies:  I  want  to  move  the  heartiest  vote  of  thanks  to  Mr. 
Kingsbury,  to  Mr.  Hobson,  to  Mr.  Brown,  to  Mr.  Webb  and  their  associates 
in  the  American  Bell  System  for  their  wonderful  kindness  in  giving  us 
this  marvelous  demonstration. 

Hon.  Benjamin  Bosse:     I  want  to  second  the  motion.. 

Mr.  Henry  C.  Murphy:  Mr.  Hobson  is  the  toastmaster  and  modesty 
would  prevent  him  from  putting  the  motion  himself.  I  ask  you  all  to 
say  "aye". 

The  motion  was  unanimously  carried.     (Applause.) 

The  Toastmaster:  In  behalf  of  Mr.  Kingsbury,  Mr.  Brown  and  Mr. 
Webb  and  our  company  employes,  I  thank  you  very  much,  Mr.  Murphy, 
for  your  motion  and  you,  ladies  and  gentlemen,  for  your  hearty  accord. 
(Applause.) 

Gentlemen,  as  I  told  you  when  the  resolutions  reported  by  your  reso- 
lutions committee  were  introduced,  we  do  not  wish  to  pass  any  resolu- 
tions, voicing  this  Conference's  sentiments,  which  do  not  meet  with  the 
full  approval  of  the  Conference.  If  the  gentleman  who  rose  to  object  to 
that  clause  in  the  resolutions,  will  merely  state  his  objection,  if  the  Con- 
ference wishes,  that  clause  will  be  stricken  from  the  resolutions.  We  do 
not  purpose  to  pass  any  resolutions  which  do  not  meet  with  practically 
the  unanimous  consent,  or  the  approval  of  a  very  large  majority  of  the 
delegates  who  attended  this  Conference. 

Hon.  Benjamin  Bosse:     May  I  offer  a  substitute,  Mr.  Toastmaster? 

The  Toastmaster:  You  want  to  offer  a  substitute  for  the  resolutions? 
I  promised  Mr.  Finn  to  give  him  the  floor  first  when  the  resolutions  were 
under  consideration.  The  Mayor  has  asked  that  he  be  permitted  to  sub- 
stitute. 

Hon.  Benjamin  Bosse:     May  I  have  the  floor  now,  Mr.  Chairman? 

The  Toastmaster:     You  may.     Have  you  a  substitute? 

Hon.  Benjamin  Bosse:     Yes,  sir. 

The  Toastmaster:  The  Mayor  wishes  to  offer  a  substitute.  Perhaps 
that,  Mr.  Finn,  will  meet  your  views.  Then  I  will  call  on  you  and  you 
can  say  what  you  please. 


THE  CENTRAL  STATES  CONFERENCE  127 

Hon.  Benjamin  Bosse:  The  members  of  the  committee  on  resolu- 
tions beg  to  offer  a  substitute  for  paragraph  six  of  the  resolutions  as  read. 
We  beg  to  offer  this  substitute:  "We  favor  the  adoption  of  more  prompt, 
efficient  methods  by  which  discriminations  between  rates  established  by 
state  and  federal  authority  may  be  eliminated,"  instead  of  the  following: 
"We  favor  federal  regulation  of  railroad  rates,  authority  to  be  vested 
with  the  Interstate  Commerce  Commission  witli  regional  sub-commissions 
sitting  in  various  traffic  districts  and  that  this  regulation  follow  the 
natural  lines  of  commerce  and  not  the  artificial  lines  of  states." 

Mr.  Lawrence  Finn:      Mr.  Toastmaster. 

The  Toastmaster:     Mr.  Finn  of  Kentucky. 

Mr.  Lawrence  Finn:  There  are  two  things  which  I  have  accom- 
plished by  my  objection:  The  first  is  that  the  resolutions  have  not  been 
adopted  until  tomorrow  by  Washington  time;  the  next  is  that  they  have 
been  amended. 

Another  proposition  that  I  desire  to  call  to  your  attention  is  this: 
That  in  this  peaceful  assembly  where  quietude  and  serenity  reigns  su- 
preme but  one  nationality  on  earth  would  raise  one  note  of  discord,  and 
that  is  the  Irish.  I  am  an  Irishman.  (Laughter.)  There  are  some  won- 
derful things  that  have  happened  here  tonight  to  which  I  desire  to  call 
your  attention.  I  heard  one  gentleman  talking  over  the  telephone,  and 
I  want  you  to  get  the  intonation  that  I  place  upon  my  voice,  which  is  but 
a  repetition  literally  of  that  intonation  that  he  placed  upon  his  voice. 
He  said  that  he  was  a  "Hughesa".  He  should  have  said  that  he  was  a 
"Hoosa"  and  not  a  "Hughesa". 

Another  gentleman  who  spoke  here  this  evening  said  that  it  would 
only  take  one  spoon  of  water  to  operate  the  telephone  for  an  indefinite 
length  of  time.  I  tell  you  that  I  have  here  before  me  the  positive  proof 
that  it  takes  almost  an  ocean  of  oxygen  and  hydrogen  to  operate  the  rail- 
road systems  of  this  country.  The  proposition,  Mr.  Toastmaster,  before 
this  convention  is  simply  this,  resolved  to  its  last  analysis,  that  all  control 
of  common  carriers  shall  be  centralized  in  the  federal  government.  And 
why?  Because  common  carriers  in  this  country  operate  under  state 
charters.  Those  state  charters  provide  what?  Thirteen  states  of  this 
Union,  from  which  ninety  per  cent,  of  the  railroads  received  their  char- 
ters, under  which  they  had  their  existence,  provide  that  no  corporation 
shall  issue  stocks  and  bonds  except  for  an  equivalent  of  money  paid,  only 
upon  property  actually  received  and  applied  to  the  purposes  for  which  said 
corporation  was  created,  and  that  little  or  no  water  shall  be  received  in 
payment  of  stocks  or  bonds. 

Why  do  the  common  carriers  want  a  federal  incorporation  act?  Not 
to  be  relieved  of  the  conflict  between  the  several  states,  as  has  been  stated 
here.  I  will  show  you,  my  friends,  that  that  is  not  true.  The  Louisville 
&  Nashville  Railroad  Company  operates  through  the  states  of  Kentucky, 
Illinois,  Georgia,  North  Carolina,  Virginia,  Tennessee,  Alabama,  Florida, 
Louisiana  and  Mississippi.  All  of  these  states  have  railroad  commission 
regulating  the  Louisville  &  Nashville  Railroad  Company  any  yet,  my 
friends,  the  Louisville  &  Nashville  Company  earned  a  return  in  1916 
equal  to  19.4%  upon  its  capital  stock. 

They  tell  us  that  the  railroad  companies  are  limited  in  their  earning 
capacity.  I  defy  a  single  individual  in  the  State  of  Kentucky  to  loan  his 
money  and  collect  exceeding  six  per  cent.  If  he  tries  to  and  goes  to  court 
about  it,  you  can  declare  the  excess  usury  and  refuse  to  pay  it. 

I  will  only  call  your  attention  to  the  fact  that  the  Chicago,  Milwaukee 
&  St.  Paul  Railroad  Company  runs  through  ten  states,  Illinois,  Wisconsin, 
Michigan,  Minnesota,  Iowa,  Missouri,  North  Dakota,  South  Dakota,  Mon- 
tana, Idaho  and  Washington,  and  notwithstanding  the  fact  that  it  runs 
through  all  of  these  states  the  Chicago,  Milwaukee  &  St.  Paul  Railroad 
Company  in  1916  earned  16.32  per  cent,  upon  its  capital  stock. 


128  THE  CENTRAL  STATES  CONFERENCE 

My  friends,  I  could  continue  these  illustrations  almost  indefinitely, 
but  I  wiint  to  show  you  here  tonight  that  there  is  but  one  object  of  the 
common  carrier,  and  what  is  that?  Federal  incorporation.  Why?  Be- 
cause so  long  as  they  receive  their  state  charters  they  are  bound  by  the 
limitations  of  the  very  law  that  gives  them  their  existence.  The  Inter- 
state Commerce  Commission  today  is  spending  millions  of  dollars  to  value 
the  railroads  of  the  country.  They  have  thousands  of  employes  in  the 
field — for  what  purpose?  Both  political  parties  in  this  country  declare 
that  the  stocks  and  bonds  of  the  railroad  companies  represent  a  fictitious 
valuation.  Woodrow  Wilson  was  elected  upon  a  platform  that  declared 
in  favor  of  the  valuation  of  corporations,  and  if  you  will  read  the  cam- 
paign book  that  was  issued  by  his  national  committee,  placed  into  the 
hands  of  democratic  speakers  that  were  to  go  before  the  nation  and  edu- 
cate the  public,  you  will  find  therein  that  everyone  of  W^oodrow  Wilson's 
campaign  managers  declared  to  the  public  that  there  were  $9,500,0000,000 
of  watered  stock  in  the  railroads  of  this  country. 

Now,  Mr.  Toastmaster.-all  I  ask  of  you,  and  all  I  ask  the  gentlemen 
here  tonight,  is  this: 

First,  I  say  that  today  and  yesterday,  you  have  been  criticising  the 
politicians  of  this  country.  Why?  Because  they  acted  in  haste.  You 
say  that  you  are  a  band  of  business  men  here  today.  I  ask  you  if  you  are 
a  band  of  business  men  assembled  here  for  the  purpose  of  coming  to  some 
conclusions  as  a  result  of  investigation,  do  not  act  hastily.  Do  not  act 
with  haste,  but  act  with  that  self-same,  deliberate  judgment,  which  ought 
to  characterize  an  assembly  of  business  men  and  which  you  said  in  your 
criticism  should  characterize  the  demagogue  and  the  politician. 

Another  proposition  that  I  ask  is  that  when  you  put  this  vote  tonight 
is  that  you  separate  the  vote.  Let  tliose  who  are  stockholders  and  em- 
ployes of  the  railroad  companies  vote  upon  this  proposition  seperately. 
Exclude  the  railroad  commissioners  and  take  a  separate  vote  from  them. 
Let  the  unbiased  public  that  pays  the  freight  rate  also  vote  upOn  this 
proposition,  so  that  the  public  will  know  where  the  sentiment  is  that 
prompted  the  vote  upon  the  resolutions  that  have  been  offered  here.  (Ap- 
plause.) 

(Calls  for  question.) 

The  Toastmaster:  Gentlemen,  the  question  is  called  for.  Is  there 
any  further  debate  or  shall  the  question  be  put. 

Mr.  Robert  Bonham:     What  is  the  question? 

The  Toastmaster:  The  question  before  the  house  is  on  the  adoption 
of  the  resolution  offered  by  the  resolutions  committee  as  amended  by  the 
committee. 

Upon  the  motion  being  put  to  a  vote  the  ayes  were  declared  to  have 
it  and  the  motion  declared  carried.     (Applause.) 

The  Toastmaster:  Gentlemen,  we  thank  you  very  much  for  your  at- 
tention. The  Central  States  Conference  on  Rail  and  Water  Transportation 
is  now  adjourned. 


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